THE HOUSING MARKET AND THE HOUSING CRISIS
IN URBAN PENINSULAR MALAYSIA
BY
BOO TEIK KHOO
SUBMITTED IN PARTIAL FULFILMENT OF
THE REQUIREMENTS FOR
THE DEGREE OF
MASTER OF CITY PLANNING
AT THE
MASSACHUSETTS
INSTITUTE OF TECHNOLOGY
BOO-TEIK KHOO 1979
SIGNATURE OF AUTHOR......................................................
DEPARTMENT OF URBAN STUDIES &
MAY 24 1979
PLANNING
CERTIFIED BY..........
................
....
THESIS SUPERVISOR
ACCEPTED BY.........
DEPARTMENT COMMITTEE CHAIRPERSON
00T11
THE HOUSING MARKET AND THE HOUSING CRISIS
IN URBAN PENINSULAR MALAYSIA
Abstract
Submitted in partial fulfilment of the requirements for the degree of
Master in City Planning at the Massachusetts Institute of Technology,
May 24, 1979.
Since 1957, the year of independence, the urban housing situation in
Peninsular Malaysia has deteriorated. Today the problems of- housing
shortage, overcrowding, slums, squatting and the persistence of residential segregation have reached "critical" proportions. How did this
"housing crisis" develop? How is it to be properly understood? What is
the relation of the housing market to the crisis? These are the questions that form the subject of this study.
Conceptually it is argued that the root of housing problems must be
located in the fundamental conflict between the requirements of the labor and the housing markets. On the one hand, the tendency of the labor
market is to keep wages as low as possible in order to maximise profits.
On the other hand, the tendency of the housing market is to keep the
costs of housing as high as possible - also for profit maximisation.
Since wages are for most people the only source of access to housing,
so long as this basic discrepancy between the requirements of the two
markets remains, so will the problems of housing.
This link between labor and housing is explored by first examining the
post-colonial changes in the labor utilisation process which have led to
an increase of poor urban households in the largest towns. It is also
shown that these changes have also resulted in an ethnic convergence in
the urban occupational structure which might be expected to lead to a
corresponding convergence in the urban housing system. In the post-colqnial period, a "modern housing submarket" emerged rapidly which engagegs
in providing housing strictly as a commodity to be rented or sold for
a profit. Through a typology of housing submarkets, it is shown that
the modern submarket has reached a position of dominance in urban housing.
The relation of the housing market to the housing crisis is then approached by analysing two things: the coincidence of a housing "boom" and
deterioration together, and residential segregation by class and race.
It is demonstrated that the modern housing submarket contributes to both
"boom" and detrioration by building housing only for those who can pay
for it. By "resolving" the conflict between low wages and high housing
costs in this manner, the modern submarket "prices out" the poor who have
recourse then only to older submarkets; the increase in the "demand" for
this older housing has led to its deterioration. At the same time, the
"pricing out" has also worked to lead more people into older residential
patterns, and hence intensified the ethnic segregation associated with
them.
Finally, some implications of this approach to housing problems in
Peninsular Malaysia are drawn. The relation of the older submarkets to
housing in general and "labor reproduction" in particular is also analysed, and it is found that they play an indispensable role in keeping
down the costs of labor reproduction. Some comments on various schemes
for improving the housing situation are also offered. Of these, the
most important is the stress.on housing problems as actually responses
by low income groups to the low wages which force them to obtain cheap
housing in order to reproduce themselves at levels affordable by the
wages.
Boo Teik Khoo
Thesis Supervisor: Tunney Lee
Title: Professor of Urban Studies & Planning
ACKNOWLEDGENENTS
Theses are rarely finished;
they are usually abandoned. This
one would have been abandoned long ago were it
of help I received from various people.
So,
not for the great amount
it is
time to "settle some
accounts."
I could not have wished for a better group of thesis advisers.
Professor Tunney Lee and Professor Ben Harrison at MIT, and Professor
Michael Stone at University of Massachusetts went out of their way to
be both helpful and encouraging. Most of all, they gave a lot of firm
and friendly criticism - perhaps the only real corrective to errors one
is
prone to commit while writing a thesis.
And errors I had many.
to their help I have managed to learn more in
the process.
Professor Paolo Ceccarelli acted as an adviser,
too.
Thanks
In a sense,
He read the entire
draft critically, and to him I owe the pleasure of some stimulating
discussions on a subject I had always thought to be rather dry.
At MIT, other friends helped as well. Professor Karen
Polenske's encouragement during the early stages is much appreciated,
as is the assistance I have received from her in these past two years.
Dan Kurtz and Phil Shapira provided some literature I did not have, and
made many useful suggestions while writing their own theses. Jeff
Cruikshank, the department newletter editor, took me on as his assistant, thereby rendering me a great service through the use of the typewriter in his office.
At one critical juncture, Darcy Kievman and Sandy
were very helpful. Basil Tommy, more than just a "colleague", gave much
more help than he might have imagined. (Anyway, he knows already what
I think of him and Joan.) Sam Kobiah, who used to be at MIT not so long
ago, taught me many important things about urban issues - it is not too
late to record my gratitude here.
The final word is reserved for Malaysians. My family and some
friends in Malaysia helped tremendously by sending data, newsreports,
and other things not available here. I need in fact to apologise for
having confused them occasionally with conflicting or ambiguous requests for materials. I can hardly be thankful enough to them.
And the Malaysian community in the USA? They shared what
materials they had, helped in typing some drafts, drew excellent maps,
made numerous suggestions, comments, and criticisms, and, yes, even
fed me from time to time. Above all, their support, encouragement, and
camaraderie made this whole undertaking a much less lonely task than it
would otherwise have been. I can only promise to try to be as helpful to
other Malaysians in similar situations.
Indebted as I am to all these people, I feel that this thesis
has been very much of a collective project - as it should be. Whatever
merit this thesis may have is as much theirs as mine. But only so that
they are not blamed for my mistakes, the responsibility for all mistakes
here lies with me.
This thesis is for my parents whose knowledge of housing
problems long preceded mine, and it did not need to be
acquired within the confines of a university.
Boo-Teik Khoo
May 24
1979
TABLE OF CONTENTS
ABSTRACT
ACKNOWLEDGEMENTS
TABLE OF CONTENTS
LIST OF TABLES
LIST OF MAPS
CHAPTER 1:
INTRODUCTION: LABOR AND HOUSING
Introduction: Background on the housing situation
in urban Peninsular Malaysia
Section 1.1:
Section 1.2:
Review of some existing approaches
to housing
An alternative conceptual
framework
1
Section 1.3:
The scope of this study
16
16
Section 1.4:
Organisation of the thesis
21
Conclusion:
Some limitations
23
CHAPTER 2: URBAN GROWTH, POVERTY, AND ETHNIC CONVERGENCE
IN THE OCCUPATIONAL STRUCTURE
30
30
Introduction
S
Section 2.1:
Section 2.2:
Section 2.3:
Sectoral shifts in employment
and urbanisation
32
Occupational stratification and
income distribution
39
Increasing ethnic convergence in
the occupational structure
48
57
Conclusion
CHAPTER 3: THE RISE OF THE MODERN HOUSING SUBMARKET
62
62
Introduction
Section 3.1:
Typology of urban housing submarkets
63
Section 3.2:
Changes in housing stock
69
Section 3.3:
The rise of the modern hou sing
submarket
76
Some effects of the rise of the
modern housing submarket
85
Section 3.4:
Conclusion
98
CHAPTER 4: THE IMPACT OF THE MODERN SUBMARKET ON
THE URBAN HOUSING SITUATION
102
Introduction
102
Section 4.1: Housing "boom" and deterioration
103
Section 4.2: Residential segregation by
class and race
114
CHAPTER 5: CONCLUSION:
BIBLIOGRAPHY
SOME IMPLICATIONS OF
THIS STUDY
126
141
LIST OF TABLES
Table
2.1
Page
Manufacturing employment in metropolitan towns,
34
1962-1970
2.2
Population changes by size of urban center,
Peninsular Malaysia 1957-1970
37
2.3
Employment distribution by occupation and
urban size 1970
40
2.4
Average monthly earnings by occupation
42
2.5
Urban income distribution by households,
Peninsular Malaysia 1970
43
2.6
Percentage distribution of monthly household
incomes of squatters in Kuala Lumpur
45
2.7
Percentage distribution of monthly household
incomes of rumah pangsa tenants, Kuala Lumpur
47
2.8
Ethnic distribution of population by urban
51
size
1957 and 1970
2.9
Ethnic composition of employment by
occupation 1957 and 1970
53
2.10
Occupational structure by ethnic group and
urban size 1970
55
3.1
Estimated supply of urban public low-cost housing
Peninsular Malaysia 1953-1974
73
3.2
Estimated number of houses built in Peninsular
Malaysia by various agencies 1955-1970
77
3.3
Number of houses built in Peninsular Malaysia 1971-75
80
3.4
Public and private sector housing performance
Malaysia 1976-78
82
3.5
The growth of private developers' housing construction
Peninsular Malaysia 1955-1978
83
3.6
Percentage distribution of housing finance
by various sources 1970-1975
88
3.7
Number of houses built in Kuala Lumpur by type of
house January 1972-June 1976
90
3.8
Housing production, 1969-1974, Private sector
92
3.9
Distribution of private sector housing in Peninsular
Malaysia by selling price and repayment categories
of housing
93
3.10
Average cost of houses by type of house in
selected towns, Peninsular Malaysia
95
Table
Page
96
3.11
Simple price index for houses in a middle-class
residential area in Georgetown 1968-76
4.1
Household expenditure on housing by various
income groups,.urban Peninsular Malaysia 1973
104
4.2
Monthly repayment scale on housing loans at
various interest rates and years of
repayment
110
MAPS
Map 1
between pages 116 & 117
Map 2
between pages 116 & 117
Map 3
between pages 117 & 118
-1-
CHAPTER 1
INTRODUCTION: LABOR AND HOUSING
Introduction: Background on the housing situation
in urban Peninsular Malaysia
The urban housing situation in Peninsular Malaysia has in
recent years attracted much attention from commentators concerned
with urban issues in the country. There appears, moreover, to be a
tacit agreement among many that the housing problems have grown more
serious in the post-colonial period (that is, since 1957). Indeed
one of the latest and most comprehensive studies on "public policy
and housing needs" in Peninsular Malaysia has warned that "without
considerably greater commitments and performance on the part of
Government the coming housing crisis in Malaysia will not be avoided."Another study,
too,
refers to a "crisis and prospective crisis in
low income housing and settlement. s2/
Does the urban housing situa-
tion in post-colonial Peninsular Malaysia in fact deserve such grave
pronouncements? If so, how have the housing problems grown to such a
critical point?
A brief review of the main features of the urban housing
crisis will be in place here. First, there is a severe housing shortage measured by the difference between "housing needs" and the
"effective demand" for housing.-3' The latest estimates of this shortage indicate that it has increased substantially owing to the
"backlogs" in the provision of housing that have not been previously
met by the pace of construction.-4/ Second, in the face of this shortage, the concomitant problems of overcrowding, dilapidated conditions
-2-
and the lack of proper facilities have also been exacerbated.crowding,
for example,
Over-
has on the whole steadily become worse since
1931, and the situation with respect to low income housing is even
6/ Third,
housing costs have escalated, especially during
grimmer.-
the last decade, and further widened the gap between housing costs
and the incomes of urban families. Whether one measures the housing
costs in therms of the sale prices of new housing, on the one hand,
or in terms of squatter housing rents, on the other, the tremendous
increase in housing costs is quite unmistakable.-'
Perhaps the clearest manifestation of the housing crisis
is to be seen in the growth or urban squatter settlements in just
about every major city of the country, and most prominently in the
capital city of Kuala Lumpur. Poor housing conditions, lack of public
facilities, the insecurity of "tenure" - all these mark the squatter
settlements inhabited by mostly very poor families.
The prolifera-
tion of squatting despite eviction and "clearance" only attests to
the immensity of the housing crisis.-8/
The overall severity of the housing situation can yet again
be seen from the attempts by the public authorities to intervene in
the situation by implementing various "public low cost housing
schemes". Several writers have suggested that in the main the intervention has not been far-reaching enough; many of the schemes have
either been insufficient to meet the needs of low income families, or
some have even turned into "modern concrete slums".-91 Of late, it
seems that the "concept" of public low cost housing schemes itself
10/ In its place, various
has been questioned as to its viability.--
-3-
"second best solutions" have instead been proposed.
"Upgrading",
"sites-and-services" and other projects have in their turn become
almost catchwords for politicians and planners dealing with the
problems of.low income housing.-A final aspect of the housing situation in Peninsular
Malaysia must be mentioned here although it is only occasionally
thought of as being part of the "problems". This is the rather rigid
pattern of residential segregation of neighborhoods along racial
lines. It is not suggested here that the residential segregation has
produced the degree of racial tension that is so familiar to Peninsular Malaysia. The latter is the product mainly of historical and
social forces dating back to the colonial development of the country
that for the most part suited the requirements of British colonialism.
However, when the racial tension has since then been heightened, not
lessened, by other issues facing the people of Malaysia, the continued racial segregation seems to stand somewhat in the way of resolving that tension. It
problems persist in
and
is
possible that so long as the current housing
their present form the conditions for reproducing
exacerbating the racial conflict may exist. And in
that sense,
it is important to recognise the persistence of the residential
12/
segregation by ethnicity as very much a part of the housing crisis.-How the crisis has developed, and how it should be perceived,
form the subject of this thesis. Our aim is-to provide an explanation
of the development of this crisis in the hopw of correcting some
mistaken notions about the roots of housing problems, and in that
sense, perhaps contribute to an eventual solution of the problems.
-4-
Section 1.1: Review of some existing approaches to housing
Conventional analyses of the housing situation in most of
the underdeveloped countries have offered various explanations of the
situation; and perhaps they have offered an even broader array of
solutions to the problems. To date most of the solutions have largely
failed to bring about more than piecemeal patching-up. The very failure suggests that there may be some problems in the analyses themselves which we can profitably review here.
The main reasons for the housing problems, according to
these analyses can be listed thus: a lack of national resources to
provide adequate housing due to the "less developed" character of
the Third World countries, the "population explosion" that has added
an intolerable strain on the national economy, a longstanding inattention paid by governments to the importance of housing and the
benefits that may be derived from it, and finally, the inequities in
the income distribution that prevent the most deprived sections of
the population from gaining access to decent housing.
At a glance, these arguments have each a certain degree of
validity. The question of housing is primarily a question of the provision of housing on the one hand, and the access to it on the other.
It is therefore relevant to consider the level of resources of the
countries to determine in general the national capacity to provide
adequate housing as well as the range of access available to the population. However, housing problems, as is obvious, does not affect
all income groups within a country equally. Almost by definition,
housing problems are synonymous with the problems of housing shortage,
-5-
overcrowding, lack of amenities, etc. faced by the low income groups.
Hence it is doubtful that the above analyses, without considering fundamentally the issue of inequality in housing, can adequately explain
the incidence of "housing crises" in
so many of these underdeveloped
countries.
To an extent it is true, for example, that the level of
national resources in
these countries has placed constraints on ade-
quate housing provision for the majority of the population. But that
cannot be the main reason considering that the western countries presumably neither "less developed" nor lacking in resources - suffer
from what appears to be urban and housing "crises".
A recent essay on
the subject has this to say of the European and North American cities:
The urban crisis is neither isolated nor symptomatically limited to a few unlucky administrations. In
all the advanced countries, cities appear to be suffering similar strains of this disease. In the United
States, not only New York, but Detroit and San
Francisco - to pick only two examples - are echoing
with the reverberations of the crisis. In Italy, not
only Naples and Rome in the South but also Milan and
Venice in the North are feeling the effects. In
Germany, cities as distict as Munich and Hamburg seem
equally afflicted. And the list goes on. If there are
social problems "common" to the advanced countries,
the "urban crisis" certainly seems to be the most
dramatic. 13/
When even as affluent a country as the United States has encountered
rather critical problems in housing, surely it is very difficult to
maintain that the Third World countries have their problems mainly out
14/
of a scarcity of resources.--
The "scarcity of resources" argument is usually presented
together with "neo-Malthusian" reasoning that covers not only housing
-6-
but other basic human needs,
food primarily.
Proponents of this line
of argument customarily claim that "overpopulation" in
the Third World
has outstripped "scarce" national resources - a claim that has been
151 Charles Abrams, for instance,
refuted by several writers.-significantly begins his classis on housing by referring to the "population
surge that has more than doubled the world's numbers in a century."
The "world's numbers" may have increased, but to trace the problems
of housing to some kind of a "demographic explosion" is extremely misleading. One could for a start point out the problems faced by "zero
growth" countries and ask why "zero growth" has not helped to solve
those problems. More to the point, as Portes and Walton have remarked,
it is not enough to present "numbers" and demographic data, show the
occurrence of rapid urban population growth, and conclude that it is
demographic considerations that basically account for housing shortages or other kinds of imbalances. They write that
what the demographic literature accompanying such
data has not stressed sufficiently is that massive movements giving rise to these trends are not
determinants but largely consequences of previous
historical and economic imbalances. 16/
(emphasis added)
Nor can the "previous historical and economic imbalances" be assumed
to have been caused by "overpopulation". McGee makes it clear when he
says that
migrants from the countryside in the South and
Southeast Asian region are moving to cities where
the rates of growth are higher than that of the
national population, unemployment (is)
high and
poverty and squalor a major part of city life.
Yet still they continue to move to the cities,
being dislocated by processes which are the consequences of the pattern of capitalist penetration. The introduction of individual land
-7-
ownership, the development of cash crops for exports, the increased monetisation of the South
and Southeast Asian countryside, technological
changes and the marketing of the cheap industrial
products manufactured in the developed countries
have all led to new patterns of social and productive relationships in the countryside. This has
marginalised some groups forcing them to migrate
and created affluence among others who have also
migrated to the cities in a process of upward
mobility. 17/
In contrast Abrams stretches the demographic argument, and nowhere do
we find him making a similarly careful examination of social changes
that themselves affect population growth to begin with. Instead,
Abrams writes that
with the frittered farmlands no longer yielding
enough food for the growing number of mouths,
and with escape to frontier countries shut off,
the cities within each country have become the
most obvious prospect for distributing the human surplus. The first problem for the people
who swarm into the cities is to get a roof over
their heads; land and housing are therefore assuming a new importance in the struggle for
subsistence. 18/
Obviously any sudden and massive increase in urban population through
either natural increase or in-migration would tend to create problems
for the housing situation. Cut clearly no amount of allusion to "human
surplus" escaping "frittered farmlands" only to "swarm"
into cities
can substitute for a rigorous analysis of the historical and social
changes that we have mentioned above. Short of that, "population
explosion" arguments are, like the example from Abrams, likely to gain
19/
only im metaphor what they lose in understanding.-It may also be argued that a previous record of inattention
to the importance of housing on the part of the governments of the
-8-
Third World countries constitutes the main problem. This certainly
cannot be discounted. Still, if past and, on the whole, present policies as well have been implemented to promote patterns of economic
"growth" that have essentially bypassed the provision of adequate
housing for the majority of the population, then those patterns of
growth must be scrutinised more carefully. It cannot be demanded that
an abrupt volte-face be made so that the same growth now produce the
"redistributive" results that they were not meant to produce in
the
first place.
Of course this is related to the argument that inequities in
income distribution constitutes the chief problem. In a sense, that is
more plausible than the others because it at least admits that there
is something systematic about.the exclusion of a large part of the population from gaining access to decent housing. The World Bank's
Housing: Sector Policy Paper mentions that "income is the most impor-
20/
tant determinant of housing".-- Likewise, Abrams recognises that "low
income is
ing" A
one of the more troublesome obstacles" to "progress in
hou-
But neither provides a satisfactory explanation of how low
typically
income has become so widespread.22/ Instead the argument
leaps "forward" to propose a solution: that is to say, it exhorts the
governments to implement various schemes to "redistribute" income or
wealth more "equitably".
Decades of development have proceeded leaving
many of the underdeveloped countries with even worse records of income
and housing disparities. With the "redistribution" nowhere nearer in
sight, it is perhaps safe to say that neither the exhortation nor the
intervention has really worked to date. It only remains to be
-9-
seen what new "solution" will be imagined.
As housing problems in the Third World have persisted, at
least one relatively new approach to housing has emerged. Represented
chiefly by Turner,
the "self-help" or "freedom to build" approach has
criticised the more conventional solutions such as massive governmental intervention via low cost housing schemes (high rise flats, for
example). The main obstacle identified by this approach is the impersonal bureaucratic stance adopted by governments, agencies, and planners who ignore the particularistic character of low income housing
and actually impose their own unsuitable ideas of what kind of housing
is really required. Turner emphasizes the centrality of varying and
particular needs of individual family units, and largely proposes that
the "freedom to build" can help to satisfy their individual needs for
23/
housing-cum-workplace.--
In a way this approach has something to com-
mend it especially in its insistence that local participation be a key
factor is the housing provision process. But, as Harms argues, what
this approach generally does is to abstract the issues of housing out
24/
of their broader socioeconomic and political context.-Housing
"autonomy"
for the low income families,
that Turner recommends,
"used
in contrast to dependency implies an actual freedom of choice."2 5
However,
in fact people in the popular sector are forced by
necessity to provide for themselves in order to
survive while others who have more cash, power and
knowledge in society are not forced to do so. They
have "freedom to build" but do not build for themselves unless they are architects, construction
workers or doing it for other reasons like selffulfilment which they may not find in an alienating work situation. 26/
-10-
In other words, as Harms adds, as far as most underdeveloped countries
are concerned,
"to suggest that the building activities are autonomous
or independent of its context is confusing the term autonomy with exclusion.
--
In the end, Turner's analysis, by focusing on individual
and particularistic needs and problems loses sight of the general
plight that will persist without broader social approaches to the housing situation. By "confusing autonomy with exclusion" and thus lauding the "autonomous" aspect of poor housing, it makes a virtue out of
what after all is only a "necessity".28
Finally, it might be suggested even that rather than focus
on a few fundamental "causes" of the housing problems,
better to treat housing as a "complex"
for is
it
would be
subject. Hence what is
called
a consideration of a plethora of "relevant factors" - building
standards and codes,
costs and availability of materials,
social
values, etc. - and and an analysis of their linkages with one another.
Although housing is
definitely no "simple"
subject,
the mere lumping
of "multivariate" factors together cannot itself amount to a sufficient
explanation of the underlying causes of housing problems. At best, that
can only explain particular issues. Such an approach to housing (or to
any social issue as broad in its implications) would only represent a
retreat from developing a theoretical framework within which it becomes
29/
meaningful to consider specific and often varying factors.--
-11-
Section 1.2: An alternative conceptual framework
In the preceding discussion, we suggested that if
the existence of widespread housing problems in
systematic problem of inequality in
the Third World as a
the access to housing,
roots of the problem should be sought in
we regard
then the
the very structure of the
society and economy with which housing problems are bound up. Here we
will provide an alternative conceptualisation of housing problems
based on the fundamental link between labor and housing that obtains
for most of the underdeveloped countries.
We can begin by considering the issue of labor absorption.
There are two dimensions to it
- the one of "labor utilisation" for
purposes of economic production and other activities, and the other
of labor absorption in the form of partaking in the consumption of the
wealth that is
produced.
The latter dimension can be termed "labor
reproduction" insofar as it consists in gaining access to the necessities for sustaining life and, therefore, reproducing the capacity to
work. Housing as shelter, in this respect, forms a major part of the
30/
necessities for labor reproduction.-The relationship between labor utilisation and labor reproduction is not a mechanistic one, even at this general level. Labor
utilisation clearly constrains labor reproduction to the extent that
different kinds of employment permit greater or lesser access to the
necessities for labor reproduction (the type or "amount" of housing,
say). Conversely, unequal access to those necessities (food, education,
health care, etc.) itself can significantly limit the access to certain types of employment. To suggest that there is this basic link
between labor utilisation and labor reproduction,
therefore,
is
not to
-12-
suggest that the two consistently complement each other in
a smooth
manner. Inasmuch as housing problems occur on a large scale, when
they occur, one might even suspect that the two dimensions of labor
absorption tend to conflict with rather than complement each other.
This possiblity arises all the more because whereas labor utilisation
operates mainly within the labor market, labor reproduction (that is,
housing, here) takes place within the domain of the housing market.
There is a possibility, therefore, that the separate operations of
the two markets may not complement each other.
The "modern" labor and housing markets as we know them today
have their origins in the historical development of capitalism. That
development yielded three important consequences that are relevant
here.
In
the first
instance,
the emergence of wage labor as the domi-
nant type of labor utilised in
economic activity was the precondition
for the existence of a labor market; but it also meant that the wage
became for most people the chief if not the only source of access to
the necessities for labor reproduction. Second, the separation of the
"offering of employment" from the "furnishing of housing31/ which
manifested itself in the physical separation of the workplace from the
home,
made it
such that the burden of obtaining housing fell
upon
those who worked, and their families. Third, it was this separation of
workplace from home, coupled with the fact that commodity production
became the hallmark of the economy, which led to the rise of housing
as a commodity to be built and sold or rented for a profit. Hence,
housing as an area for investment led to the rise of a "generalised"
32/
housing market just as a labor market had emerged.--
-13-
These two markets, among the most important institutions in
the economy, operate independently as it were despite the close link
between labor and housing. The level of the wage can vary with time
depending on such factors as the "supply and demand" of labor, the extent of collective bargaining, and so on. It is in the interests of
employers to keep wages as low as possible so as to maximise profits.
However low the wage can be though, in the long run it cannot be lower
than what it takes for subsistence if labor reproduction is to continue. The "subsistence level", biologically as well as socially defined,
is determined by the cost of the necessities for labor reproduction.
Among these is of course housing which plays a major part. Hence, if
housing or "shelter" costs are high, wages would have to be at a sufficiently high level to accomodate the shelter costs.--
33' Or if
the
shelter costs rise, then wages must rise, too, to meet the increase.
Similarly, the housing market dynamics decide the costs of housing
(either for rental or sale). But contrary to the tendency of the labor
market to keep wages low, the housing market tends to keep the costs
of housing as high as possible, again to maximise profits. There is
also a limit to how high the costs of housing can actually go; for even
though people must pay for high costs or increased costs of housing in
the short run, they obviously cannot pay more than what their wages
permit them to.
The underlying cause of housing problems can thus be traced
to the difference in the requirements of the labor and housing markets.
Whereas housing as a necessity must be low in cost for most people to
-14-
obtain it, housing as a commodity has to be high-priced for it to be
a profitable area of investment. In the particular situation that
obtains for most underdeveloped countries, wages tend to be low while
simultaneously housing costs remain very high. How then can the two
be reconciled? Conceivably, one way is to raise wages or effect a real
redistribution of income so that high housing costs may be afforded
by most people. The other way is to lower housing costs to accomodate
the low wages of most people. But in an economy which by and large
depends on low wages, any significant trend in wage increases would
34/ On
threaten the viability of the labor market.-the other hand, to
lower housing costs substantially would tend to lead to the collapse
of the housing market. In reality, this fundamental conflict between
the requirements of the two different key institutions remains irreconciliable.- -- And hence the persistence of housing problems - and
predominantly for those with low wages at that.
The above discussion outlines a theoretical framework that
we think must form the point of departure for an informed understanding of housing problems faced by many underdeveloped countries. The
framework itself, however, cannot predict the specific forms in which
housing problems can and do arise. That properly belongs to an analysis of the housing situation and, as has been suggested above, the
ways in which the labor and the housing markets operate and actually
conflict with each other in the context of the social conditions which
prevail in a particular period. To take one example, the intervention
of the governments in the housing sector can be understood essentially
as an attempt to resolve the problems created by the.irreconciliable
difference between the requirements of the labor and housing markets.
-15-
Housing clearly is too crucial an area in the society for its problems
36 /
to be left unattended for long.-- But short of an analysis of the
housing situation, it cannot be determined a priori what steps will
const-itute the "intervention",
or for that matter, how successful it
will turn out to be.
As will be shown in subsequent chapters, this framework
which presupposes a market in housing (taken as a commodity) is applicable in the case of Peninsular Malaysia only to the "modern submarket".
But the more general relation of housing markets to labor reproduction
will be shown in the Conclusion when we deal with the role of the
"older submarkets"
in the economy as a whole. Where mention of a "housing
market as a whole" is
made, both the "older" and "modern" submarkets
are referred to together.
-16
Section 1.3: The scope of this study
It
is
within this context then that the main concerns of
this thesis can be stated. Post-colonial Peninsular Malaysia,
like
many other underdeveloped countries, has undergone a process of economic development that has incurred significant shifts in sectoral actiIn
vity from the "primary" to the "secondary" and "tertiary" sectors.
37/
the same post-colonial period there has been substantial urbanisation.-The influx of people from both rural and smaller urban areas into the
major towns has created the conditions for a profitable housing market that is organised and managed by real estate agencies, private
developers, and financial institutions (this is what will be referred
to as the "modern" housing submarket in
"modern" housing market is
this thesis).
The rise of this
a recent but rapid one; today it
occupies
a preeminent position in the business of housing provision. Yet while
the increased demand for housing has created a "boom" in
"boom"
takes place in
housing,
the midst of a sharp deterioration in
this
the hou-
sing situation in terms of increased shortages, overcrowding, proliferation of squatter settlements, etc. At a time when the modern housing market has built more houses than ever before, various writers
38/
have warned of an impending housing crisis.-- Is there any relation
between these two seemingly contradictory trends of "boom" and deterioration? How are they to be explained?
Furthermore,
the housing market is
not an undifferentiated
and monolithic one even though we have so far only referred to one
market.
In reality several housing "submarkets" may be distinguished
-17-
on the basis of criteria such as costs, type of housing, tenurial
status of residents, income of residents, and the ethnic composition
of the groups that each submarket caters to. The modern submarket
that we will be emphasizing is no doubt the latest one in the history
of housing provision in the country, but it appears to be rapidly
overshadowing the others. Such a rapid rise by the modern submarket
must certainly have had important repercussions on the other submarkets, and for the housing situation in general. What specifically
has been the impact of this rapid penetration of the modern submarket
into the housing sector on urban low income housing? Have low income
families been able to gain access to the houses provided by this submarket? If they have not, have the other submarkets been able to accomodate their housing needs?
A treatment of the operations of the different housing submarkets will allow us to determine the "residential circuits" traversed by low income families in the search for housing that can meet
their housing needs. The issue of residential circuits in an important
one that requires some elaboration here. Unlike other commodities
needed for labor reproduction, housing carries with it the consequence
of residential and community location and formation among other things.
Insofar as the residential circuits through which labor is absorbed
into the urban housing system are clearly and rigidly divided by income cosiderations, the phenomenon of "divided cities" is likely to
occur - that is, the spatial location of neighborhoods and the neighborhoods themselves are differentiated by the income levels of their
inhabitants.-39/
-18-
The situation can be more complex: in the case of Peninsular
Malaysia, not only are neighborhoods segregated by the income levels
of their residents, they are frequently segregated ethnically as
well. This pattern of segregated residential location poses a major
problem for the country with its record of racial conflict. This
situation of raciallysegregated housing is often commented on but it
remains to be satisfactorily accounted for. Prior to 1969, the situation, as many writers have rightly pointed, can be attributed to the
colonial development of the country whereby the Chinese formed the
most urbanised section of the population while the Malays formed the
least urbanised section. Theoretically, and concretely, this can be
explained by earlier process of labor absorption which largely utilised Chinese labor in the urban sector of the economy and essentially
confined Malay labor to the rural agricultural sector. Given that in
general labor utilisation and labor reproduction spheres have to be
spatially close to permit a daily alternation between the two, it can
thus be explained that a differentiationby ethnicity in the sphere of
labor utilisation led to a corresponding differentiation in the sphere
40/ Especially after 1969, and with the imple-
of labor reproduction.-
41/
mentation of the New Economic Policy-- the government has made a
concerted attempt to break down the ethnic differentiation in the
sphere of labor utilisation. There has subsequently been an increasing
convergence of labor of different races in the urban economy at virtually all levels, for example, in the professions, commerce and
manufacturing. The question that we are interested in here is whether
-19-
this convergence in the sphere of labor utilisation has been accompanied by a corresponding convergence in the sphere of labor reproduction - in other words, whether there has been an increasing interracial "mix" in the composition or urban heighborhoods. If indeed the
racial segregation of heighborhoods has persisted, among which groups
(by income) is it most pronounced? How can the segregation or its
persistence be explained in terms of the residential circuits we have
mentioned briefly? And, finally, what has been the role, if any, of
the modern housing submarket in lessening, maintaining, or exacerbating the pattern of segregation?
In the face of an overall deterioration of the housing
situation it would be pertinent to ask what practical implications
can be drawn out of our understanding of the housing situation. These
implications, whatever they may be, it seems to us, must be related to
the ways in which the low income families respond to the detrioration
since they are the ones most directly affected by the situation. In
a sense, the problems of housing -overcrowding, slums and squatting are actually responses to the situation, not problems in and of themselves. (For instance, the proliferation of squatting in the urban
areas of the Third World has gradually been recognised as a response
to housing and land shortages and not, as previously thought, some
"social disease".)
Finally, the thesis will attempt to draw out some major
implications for improving the housing situation. At the outset, it is
necessary not to confuse this with concrete proposals for intervening
-20-
in one or another of the stages in housing provision. We will merely
try to emphasize various issues in housing that we think must be
resolved if an improvement in the housing situation is to be attained.
-21-
Section 1.4: Organisation of the thesis
In order to deal with the major questions posed above, the
thesis will attempt to do the following:
'i. trace the post-colonial urban labor utilisation process, and
focus on the distribution of employment by economic sectors, and
the occupational structure of the major towns in Peninsular
Malaysia;
ii. analyse the income distribution in the urban areas to ascertain
the level of resources available to different occupational and
income strata among the urban population, and thus determine the
differential access of these strata to urban housing;
iii. examine the employment and occupational structure in terms of
its ethnic composition to see if an ethnic convergence has
taken place in the post-colonial period;
iv. analyse the urban housing system in terms of housing provision
by the different housing submarkets, and hence construct a typology of submarkets based on the criteria mentioned earlier;
v. discuss the changes in housing stock and the dynamics involved,
and thus determine the number and types of houses built or otherwise made accessible by the submarkets;
vi. compare the costs of housing with the income levels of urban
households to see what the differences between them might be, and
also determine if other means of access to housing are available;
vii. show the position of the modern submarket in relation to other
submarkets,
and,
-22-
viii. show the various residential circuits that operate and determine if changes have occurred among them that have direct relevance to the issue of residential segregation.
Chapter 2 will deal with issues raised under i., ii., and
iii., while the rest of the issues will be treated in Chapter 3. Based
on the findings in Chapter 2 and Chapter 3, Chapter 4 will then
attempt to answer the questions that have been raised above. It will
assess the impact of the rise of the modern submarket on the overall
housing situation, and focus on the following, providing an explanation for each:
i. the coincidence of a housing "boom" and a deterioration in urban
housing;
ii. the impact of the modern housing submarket on low income housing
in
particular,
and,
iii. residential segregation by income, and especially by ethnicity,
and the role of the modern submarket on earlier patterns of
segregation.
In the final chapter, Chapter 5, the practical implications of our
analysis will be drawn out. The emphasis will be on the responses by
low income families to the housing situation, and how perhaps those
responses can help to improve the situation.
-23-
Conclusion: Some limitations
There are some limitations to the scope of this thesis that should
be clarified from the outset. Although we realize the importance of
the role of the government in attempting to solve some of the major
problems in urban housing, this thesis will not deal with the issue of
governmental intervention in any depth at all. Data and other kinds of
limitations do not permit a detailed and concrete analysis of the
policies involved. Where relevant, reference to these policies and
the ensuing implementation will be made. But the vastness of this
subject makes it
fairly certain that any analysis that is
not able to
draw out specific insights into the politics as well as other social
considerations that underscore the governmental policies and programs
is not likely to offer any informed understanding of the government's
role in housing. This analysis should form the subject of another
essay altogether. It is hoped that this thesis itself will indicate
some direction for research into governmental policy in the housing
sector.
The necessity for a historically specific analysis of the
housing situation has been stressed in Section 1.2, and to the degree
that available data allows us, this will be carried out in this thesis. For parts of the thesis, necessary data is lacking, and broad
analyses will have to be undertaken as a substitute. In particular,
information on the operations of the modern submarket is still very
scanty given its recent importance. Moreover, the only census on housing to have been undertaken in Peninsular Malaysia was conducted in
-24-
1970,
and data on previous periods is
not quite as systematic.
In
several instances, then, estimates are used to substitute for more
precise figures that are not obtainable.
.
. This last point is important, for the thesis makes no pre-
tension to being the last word on housing in Peninsular Malaysia. Its
main purpose is
to provide an understanding of the problems from the
theoretical perspective stated primarily because we think that an
alternative conceptualisation of the housing situation is much needed.
Despite the limitations mentioned, therefore, an attempt will be
made to show that the conceptual framework developed in this thesis
makes ample sense.
-25-
CHAPTER 1: FOOTNOTES
1. Rabieyah Mat (1978:285). This thesis includes perhaps the most
comprehensive analysis of the 1970 Population and Housing Census
of Malaysia and other data on housing in Peninsular Malaysia.
2. Kamal Salih (1976:21). "The statistics presented above and the
dimensions of the housing situation which they describe suggest
the emergence of a crisis in housing for the poor. It is a crisis
caused by the discrepancy between needs and provision of adequate
housing at the standards which the low income can afford to pay.
It is further aggravated by the inability of the private and public
sector to fill the housing gap. If the structure of socially provided housing, through both public and private means, persist in
patterns outlined above, the gap may even widen."
3. Chander (1977:1). The Department of Statistics (Malaysia) defines
housing needs as "the number of units of housing that would be
required to provide housing to the population." This takes into
account requirements due to: i. the backlog or shortages that
existed in the base period, ii. replacement of sub-standard or
inadequate units, iii. requirements to meet growth in population,
and, iv. normal replacement of units which are destroyed or units
which have reached the end of their life. On the other hand, the
effective demand for housing takes into account the households'
"ability to pay" for purchased or rented units. Thus, between 1970
and 1975, for example, the "housing needs" were estimated at
505,000 units (if the current average density of 1.08 households
per living quarter is to be maintained) while the "demand for
housing" for the period was estimated at 303,000 units. That is,
the market demand for housing really belies the larger needs for it.
The housing shortage can further be seen from the fact that for
1971-75, only 259,000 units were actually constructed for the
whole fo Malaysia.
4. The backlog for 1970 alone came to 113,000 units. See Chander
(1977:28). By 1975, this backlog more than doubled to a figure of
252,000 units - this despite the fact that the five years saw
a "housing boom" (see Chapters 3 and 4 below).
5. For a summary of housing conditions, especially the lack of proper
facilities, see Table 3.17 in Rabieyah Mat (1978:133).
6. The following table indicates average density for Peninsular
Malaysia, 1931-75. The persistence of overcrowding, indeed its
deterioration, can be seen. (Overcrowding in urban areas are generally higher than in rural areas; and for the low income areas, the
conditions are very much worse. The average densities here do not
reflect the tremendous overcrowding in shophouses for instance; for
an account of that, see Kaye (1960), the most detailed study of
-26-
a "Chinatown" area. A description of urban densities in Kuala
Lumpur is provided in Sidhu (1978:47-53))
Average density, Peninsular Malaysia
1931-1975
Year
Persons per housing unit
1931
1947
1970
1975
4.8
5.2
6.1
7.0
Source: Rabieyah Mat (1978:100); figure for 1975 comes from
Malaysian Business (March 1976)
7. See Table 3.11 below (Chapter 3) for costs of housing Georgetown
from 1968 to 1976. Refer to Wegelin (1978:10-11) for increases in
squatters' rents in the Klang Valley area.
8. For information on squatting, and the problems of poverty and housing associated with it, see Wegelin (1978), Ishak Shari (1976),
Pirie (1976). Friel-Simon and Khoo (1976) provides a historical
perspective on the issue.
9. Abraham (n.d.:20) gives a good description of the conditions at the
Rifle Range Flats in Georgetown. For an analysis of public housing
policy, see pp. 2-12. This study observes that "public housing has
been a pawn in the political chess game of the political powers."
(p.13) Dwyer (1975:98-99) suggests that "Malaysia is a very good
current case" illustrating how only "token amounts" are devoted to
public and low income housing.
10. Wegelin (1978). A recent study is found in Lim (1979): a critique
of the "existing public housing program and its ineffectiveness to
house the urban poor" can be found in pp. 43-64
11. See, for example, The National Star (Nov. 1978:7) on "sites-andservices" ("New System of Cheap Homes"). Also Lim (1979) on squatter
upgrading, and Kamal Salih (1976:36-40) on "second-best solutions".
12. Mention of the ethnic segregation problem is made in Sidhu (1978).
See Chapter 2 of Sidhu's study on Kuala Lumpur13. Research Planning Group on Urban Social Services (1978:71). Also
see especially pp. 72-73 on "the inadequacies of prevalent
interpretations".
14. Harms (1972:73-94), and the essays by Marcuse, Piven and Cloward,
Hartman, and Stone in Pynoos, Schafer, and Hartman (1973)
-27-
15. For a critique of Malthus' theoretia-l assumptions and his method,
see Harvey (1974:258-62). See also Collins and Lappe (1977), and
George (1976) for a closer look at the "myths of scarcity", and
"the real reasons for world hunger. A'review of these two books is
found in Bulletin of Concerned Asian Scholars (vol 10, no. 1, Jan.Mar. 1978); the review is by S. Lowentin.
16. Portes & Walton (1976:36). On migration, they have this to say:
"It is not excessive ambition or perverse instinct that makes
masses stream into cities, as so many journalistic reports have
suggested. Rather, it the absence of alternate channels for survival in the existing economic structure. This structure is not a
product of the poor but has been framed for them by the results of
industrial and commercial investments, which, in turn, fit the
particular characteristics of capitalism in the region." (pp. 32, 44)
17. McGee (1977:198).
18. Abrams (1964:2).
19. See Harvey (1974) for an analysis of the "ideological" aspects of
Malthusian arguments about "overpopulation" outpacing resources.
20. World Bank (1975:12)
21. Abrams (1964:52). To say that "low income is one of the more troublesome obstacles" is really to understate the problem.
22. Explanations of "low income" that are based on arguments about the
"low productivity" of workers are essentially faulty. See Wong (1979)
for empirical evidence refuting such arguments in the case of
Peninsular Malaysia.
23. Refer to essays by Turner, and Fichter, Turner & Grenell, in
Turner & Fichter (1972).
24. Harms (1976:230-31). Harms's conclusion in this essay states that
"finally, the social perspective of the self-help advocates rests
on the idea that the actions of the state should be minimised and
the actions of the individual maximised - which only underlies how
simplistic much of the self-help argument is."
Roweis (1972) makes similar and equally pointed criticisms of the
"self-help" premises.
25.
Harms (1976:231).
26. ibid.
27. ibid., and Roweis (1972:1-3).
28.
ibid.
-28-
29. Massey (1974:229) writes that,
a complex dynamic system', and
city' as if acknowledgement of
analysis." The remark pertains
cable to "housing".
"constantly we read of "the city as
'the complex system that is the
complexity could substitute for its
to the "city" but is equally appli-
30. Note that the "necessities for labor reproduction" are not a
static quantity for all societies in all periods. In it broad sense
"labor reproduction" is historically and socially specific. An
interesting essay on labor reproduction is found in Macfarlane
(1978:100-20).
31. Vance (1971:112-13). Vance characterises the "capitalist system of
housing as being founded upon the following "practices and attitudes":
1. the separation of the offering of employment from the furnishing
of housing
2. the establishment of the concept of rent-paying ability as the
determinanat of the quality and location of housing
3. the transformation of society so that the traditional gild and
civic distinctions were submerged and replaced by ranking along
lines of the ownership of capital
4. the increasing awareness of a need for class ascription to be
furnished in part by the location of residence
5. the combination of sorting by rent-paying ability and the need
for class ascription indicated the necessity for homogenous
housing areas based on economic status
6. the tendency of a district's ascription to tarnish with age
joined by inflation of construction costs to cause a shift in
the cachet of cost to successive increments to the housing supply
7. this generational shift in the area of miximum esteem led to the
generational abandonment of housing by those with the highest
rent-paying abilities
8. under the notion of proportion in the city, only the higher income groups would be furnished with new housing, leaving the
lower classes to secure housing through a filtering-down process
9. thus, there arose the notion that the edge of the was the most
desirable area and its core the home of the lower classes; only
where unusual circumstances maintained a high quality ascription
for a central area was this rule varied
10. so long as it was thought that filtering down was a sufficient
system to provide lower-class housing any scalar increase in production and trade could not fail to produce a shortage workingclass housing, an increase in its cost and a severe deterioration in the quality for the mass of urban dwellers. At that point
the capitalist system of housing provision reached its most unrelieved expression, with its grim qualities most strongly
revealed.
(pp. 112-13)
-29-
32. Vance (1967). "Generalised housing" is described as one "wherein
the controls are those of a housing market rather than a work
relationship" (p. 97). The linkage between labor and housing
markets' emergence is seen from Vance's statement that, "the
creation of a proletarial was accompanied by the creation of the
residential quarter as distinguished from the mill village. This
was the watershed of housing generalization." (p. 126).
33. See the essay by Stone in Pynoos, et al, (1973).
34. This is most clearly seen in the restrictions on unionization and
collective bargaining imposed by governments on workers in MNC
factories attracted first of all to the Third World because of the
extremely low wages. The movement of United States MNCs from USA
to the Third World more than amply demonstrates the significance
of low wages as a factor in the "stimulation" of the manufacturing
sector in these countries.
35. Stone, op.
ciji.
36. Wegelin (1978:56-57); Edel (1971:76-89) shows the widespread conflicts in American cities over housing and land-use changes, and
the involvement of state and local governments in such conflicts.
37. See Chapter-2 for elaboration.
38. Cf. fn. 1, 2 supra.
39. Vance (1971:112-13).
-30CHAPTER 2
URBAN GROWTH, POVERTY, AND ETHNIC CONVERGENCE
IN THE OCCUPATIONAL STRUCTURE
Introduction
The term "pseudourbanisation" has been employed by McGee to
characterise the development of Third World cities that have grown
"despite their failure to industrialise, not because of industrialisation as they did in the Western countries.l/ Third World cities have
failed to industrialise mainly because they have been developed as
administrative centers and as links between the colonies and the colonizing countries in order to facilitate the maintenance of "dependent"
relations between the. But because of the massive rural-urban migration, itself the product of the colonial penetration into and transformation of the countryside (see Chapter 1, Section 1.1) a majority
of the urban population was forced to look for employment in nonagricultural as well as non-industrial sectors of the economy. Hence,
the expansion of the "tertiary" sector "greatly in
excess of what is
required" with, the result that "hawkers, vendors, trishaw drivers,
shop assistants and government employees proliferated in the cities of
,2/
the Third World."This is not the place really to review McGee's concept of
"pseudourbanisation" in any depth. Suffice it to say that apart from
,3/his concept has the merit
the unfortunate use of the word "pseudo"-
of linking urban growth (and problems, too,) with the issue of changes
in the sphere of labor utilisation, that is, employment. In this
respect, it can be made use of as a starting point for this
-31-
section, because within the framework that we have developed for analysing the urban housing situation in Peninsula Malaysia, it is logical
that we start with the sphere of labor utilisation in the post-colonial
period.
Briefly, the sphere of labor utilisation, and specifically,
the post-colonial changes in the process of labor utilisation, may
affect the housing situation by:
i. expanding employment opportunities in the cities, and drawing
labor to urban areas with the consequence that increased urbanisation
(growth in population) will place a greater "demand" on
housing facilities,
ii. differentiating the employment structure into various occupational
and wage groups which possess unequal access to housing, and,
iii. utilising labor in such ways as to affect the ethnic distribution
in the urban economy.
To take into account all the above, our discussion in this chapter will
focus on the sectoral changes in the post-colonial economy, the urbanisation trends associated with them, the income distribution, and the
ethnic distribution in employment and the urban occupational structure.
-32-
Section 2.1:
Sectoral shifts in employment and urbanisation
Like most other Third World countries, the post-colonial
development in
Peninsula Malaysia has undergone a shift in
emphasis -
where labor utilisation is concerned - from the agricultural to the
non-agricultural sectors of the economy.
The reasons for this sectoral
shift and particularly the decline in employment within the agricultural sector have been dealt with in
4/
repeated here.-
other studies,
and need not be
The overall sectoral shift in employment for Peninsula
Malaysia has been significant though not very dramatic.
Between 1957
and 1975, the agricultural sector's share of total employment declined
from about 60% to 46%.-
This decline represents a shift in employment
to the secondary and tertiary sectors.
Within the same period, the
former's share of employment grew from 13.6% to 19.4% while the latter's
increased from 24.2% to 31.4%.
For our purposes, the real significance of this sectoral
shift lies in the rapid expansion of the secondary and tertiary sectors
in the largest towns which have consequently absorbed more labor than
other urban areas.
In metropolitan areas (population over 75,000)
the
secondary sector accounted for almost 35% of total employment (with
manufacturing alone taking up 20.4%) in 1970, and the tertiary sector
had more than 56%.-7/ Generally, the higher the degree of urbanisation
(that is, size of population), the higher is the share of employment
in the secondary and tertiary sectors.
What this suggests is that on
the whole the largest urban centers have expanded more rapidly than
other areas.
This can be shown for manufacturing in the largest towns.
-34-
Table 2.1: Manufacturing Employment in Metropolitan Towns
Town
No. Employed in Manufacturing
(000's)
1962-1970
Average Annual
Increase
1962
1970
18.3
46.3
12.3
3.5
10.3
14.4
15.5
5.7
Ipoh
8.2
13.3
Johore Bahru
6.9
15.9
52.4
91.5
uala Lumpur &
Petaling Jaya
lang
Georgetown
TOTAL
Source: Adapted from Ahmad Sidek,
()
-11.8
6.2
11.0
7.2
"Urbanization in Peninsular
Malaysia" (Part II:
Employment
Patterns and Structural
Changes, not dated).
Table 3.2 (p.25), Table 4.1 (p.27)
-35-
periods in which these trends in migration have taken place.
From 1957 to 1970, rural-urban migration did not approach the
extent that has occurred in other Third World countries.
The agricul-
tural sector's share of employment, as we have seen, did not decline
very dramatically, and the main part of the expansion in manufacturing
had not taken place until about 1970.
For this period, it has been
suggested that displaced labor from rural areas was to some extent
absorbed into the armed forces (Malay labor), repatriated (Indian labor)
10/
or even drawn to Singapore (Chinese labor).-
The rest of the dis-
placed labor from agriculture probably accounted for the small extent
of rural-urban migration that did not occur.
After 1970, however,
rural-urban migration certainly accelerated.
Comprehensive data to
support this is not available but virtually all impressionistic reports
attest to this.
With the further decline in the agricultural sector's
share of employment - in part checked
by rural land development
schemes - rural labor has migrated into larger urban areas to be absorbed into the emerging industrial sector, and the tertiary sector.
This
has prompted a massive influx of rural migrants into major industrial
areas, the Kuala Lumpur-Petaling Jaya connurbation being the most
important.
That this rural-urban migration was becoming important at
about the end of 1969 can be seen from the fact that rural in-migrants
to the Selangor metropolitan area between August 1969 and September
1970 almost doubled the corresponding figure for August 1968 to August
1969.-
Further evidence to support this observation comes from
studies on new factory recruits in the metropolitan areas; a large
proportion of them were of rural origin.--2
It is very likely that
-36-
rural-urban migration after 1970 would have shown an even greater
increase were it not for a substantial migration of rural labor to
Singapore. 3/
The absence of substantial rural-urban migration in the
period between 1957 and 1970 does not discount the possibility of
other trends of migration. On the contrary, it raises the question of
migration from smaller towns to larger ones.
much. It
Table 2.2 suggests as
shows that the average annual increase in population for
towns with population below 20,000 was substantially less than that
for Peninsular Malaysia as a whole. More importantly, the population
growth for the small urban areas fell considerably behind that for
larger towns, suggesting in fact a migration of labor from the former
to the latter. In some cases, small towns have been found to have had
14/
absolute decreases in population.-- The migration trends might have
even been more skewed in favor of a few large towns with migration out
15 /
of some large towns actually taking place.--
At least one important reason for this inter-urban migration
can be attributed to the decline of the "small capitalist" sector that
has been the chief basis of non-agricultural economic activity in
16/
small urban areas.-
the
This decline stands in contrast to the expan-
sion of the public service and corporate sectors located primarily in
the metropolitan areas. Consequently, it is probable that labor displaced from the "small capitalist" sector has migrated into the metropolitan centers. There is no evidence for us to decide whether this
trend in inter-urban migration continued after 1970. To the extent that
the decline in the "small capitalist" sector has not been offset by equiva-
-37-
Table 2.2: Population Changes by Size of Urban Center, Peninsular
Malaysia, 1957-1970
Average Annual
Population
Size of Urban
Growth Rate ()
1957-1970
Center (1970)
1957
1970
ABOVE 100,000
882,136
1,412,873
3.57
50,000-100,000
437,962
727,809
3.98
20,000-50,000
251,540
339,335
2.33
10,000-20,000
242,125
305,663
1.81
6,267,995
8,819,928
2.66
PENINSULAR MALAYSIA
Source: Narayanan,
"Patterns and Implications of Urban Change in
Peninsular Malaysia", Table 4, p. 60
.0
-38-
lent expansion 1n other sectors (as for example, land settlement schemes
in rural areas) the out-migration may well have persisted.
possible though
But it is
that the population of small towns may increase in the
near future with the creation of new urban areas as part of large
17 /
regional development schemes.-case for the older small towns.
This would nonetheless not be the
-39-
Section 2.2: Occupational stratification and income distribution
The sectoral shift and the urbanisation trends related to it
together represent a significant movement of labor into the largest
towns. But the in-migrant as well as the non-migrant labor in these
towns do not form a homogenous mass because just as the process of
labor utilisation is differentiated by broad economic sectors, so can
it be differentiated by broad occupational groups. It is important,
therefore, to distinguish the urban population by occupational groupings, and the wages associated with them in order to arrive at a picture of the socioeconomic groups found among the urban residents.
The occupational structure for urban areas of different
sizes is
shown in
Table 2.3. Broadly two main groups may be distingui-
shed: a "white-collar" group comprising "administrative, managerial,
professional,
technical and clerical" personnel,
and a "blue-collar"
group made up of most of the rest of non-agricultural workers. The
table indicates that as the urban size increases, so do the percentages
of both white-collar and blue-collar occupational strata. This trend is
seen most clearly in the case of Petaling Jaya which, with Kuala
Lumpur, forms the most highly urbanised area in the country. (The high
proportion of white-collar workers in Petaling Jaya has given this
town the reputation of being a "middle-class" town.)l8
By matching
this data with the previous information on the expansion of the nonagricultural sectors in the large towns, it can reasonably be said that
there has been an increase in both white-collar and blue-collar workers
in these places, with the latter accounting for more than half of the
-40-
Table 2.3
Employment distribution by occupation and urban size, 1970
P.J.
town
Admin. and
Managerial
Rural
( 1,000)
Small urban
Medium urban
Metrop.
(1-10,000)
(10-75,000)
(75,000+)
Metropol.
Selangor
only
7
0.3
0.7
1.3
2.0
2.4
Profess. and
Technical
19
2.5
5.8
9.3
9.0
9.5
Clerical
19
1.8
3.8
8.2
14.3
17.2
Sales
13
4.3
12.6
16.7
16.2
13.9
Service
18
4.2
9.9
13.8
18.0
19.3
Production
22
13.2
22.6
32.3
34.1
32.5
Agriculture
1
68.7
40.4
14.3
2.7
1.7
Inadequately
described
1
5.1
4.3
4.1
3.6
0.4
100.0
100.0
100.0
100.0
All
100.0
Source: Wong (1979), Table 5.35
100.0
-41-
occupational distribution for metropolitan areas. The increase in both
these groups and a "polarisation" between them has been suggested by
other studies on occupational stratification in urban Peninsular
Malaysia.1-/
The distribution between these broad occupational groups is
further shown by the income differentials between them. It will be observed, from Table 2.4, that for all the years shown, substantial differentials in earnings exist. And if we look at the change in average
earnings over the years during which the surveys were conducted, we
find that while earnings for the white-collar groups have risen to some
extent,
the same does not hold for the blue-collar workers.
What this
suggests is a relatively stable division between the two broad groups
in the post-colonial period.
The above data should already convey a general picture of a
rather uneven urban income distribution, and this is borne out by data
presented in Table 2.5. Of all urban households in 1970, 57% had monthly
incomes of less than $300 while only 8.2% had over $1000 per month.**
Since the income categories are not further disaggregated, it is not
possible to arrive at a finer income distribution which would show in
greater detail the urban income inequality that exists. For the two
largest towns in Peninsular Malaysia, Kuala Lumpur and Georgetown, the
percentages of households with monthly incomes below $300 were found to
be 53% (1968) and 70% (1971) respectively.--0
The incidence of urban
poverty, moreover, may be increasing instead of diminishing. One study
estimated the average annual increase of poor non-agricultural households to be 3.3% as compared with 0.7% for poor agricultural households.2l/
**The figures given, and subsequent ones, are in Malaysian dollars.
- 42 -
Table 2.4
Average monthly earnings by occupation (at the 1-digit level)
1966/7
West Malaysia
Family Survey(married men only)
Managerial/admin.
1967/8 SESS
(cash income
of principal
earner of household)
1970 PES
(all income
of earner)
Av. Mthly. earnings
Gini
Coeff.
527
669
0.5291
388
424
0.4176
357
Professional/tech.
Clerical
309
312
272
0.3742
Sales
217
206
220
0.5277
Service
208
193
169
0.4590
Production & related
n.a.
n.a.
160
0.3979
- production & crafts
(179)
(n.a.)
(151)
- gen. labourer
(108)
- transport & commun.
(152)
(183)
67
83
- farmer
(n.a.)
(n.a.)
- farm labourer
(n.a.)
(n.a.)
Agricultural worker
(n.a.)
Source: 1966/7 - Hirschman (1975): Table 3.2, 1967/8 - Table 6.2,
Cited in Wong (1979) Table 6.1
(n.a.)
n.a.
(101)
(0.4234)
(87)
(0.3339)
1970 - Anand (1978): Table 6.6
-43-
Table 2.5: Urban Income Distribution by Households,
Monthly Household
Number of
Income ($)
Households
less than 300
Peninsular Malaysia,
Percentage
253,275
56.9
300
-
499
90,805
20.4
500
-
999
64,543
14.5
1000 and above
36,500
8.2
TOTAL
445,123
100.0
Source: Post-Enumeration Survey
-
1970
-44-
More precise data on the trends in urban income distribution is unavailable, but it is reasonably certain that the urban income distribution
remains fraught with inequality, and has not seen any marked improvement.
22/
--
To that extent, it can be said also that broad socioeconomic
distinctions are observable among the urban population - a low-income
blue-collar group, and a middle- and upper-income white-collar group.
(It is difficult to be more accurate in our distinction for reason
already mentioned but presumably a lower-middle-class exists in this
distribution.)
There are, furthermore, particular urban households which
experience the highest degree of povery, and they may usefully be indicated here. One obvious group is made up of squatter households. In
one survey conducted in Kuala Lumpur, over 90% of the employed squatters
were found to be "petty traders, industrial, manual, and transport
,23/
workers, semi-skilled and unskilled workers, part-time workers, etc." Given that the wage rates for these occupational categories are among
the lowest, it is hardly surprising to find that the preponderant number of squatter households are indeed very poor. Table 2.6 confirms
the persistence of poverty among the squatter families, over 80% of
whom have incomes below $300 per month. The three surveys are remarkably consistent in
this matter.
The other major group of urban poor is to be found among the
tenants of public low cost housing (rumah pangsa). These tenants are
sometimes thought to be better off than the squatters considering their
ability to pay higher rents and utilities costs. In fact, the results
-45Table 2.6: Percentage Distribution of Monthly Household Incomes of Squatters in Kuala Lumpur
Monthly
Income
Kampung Kelantan
Survey (1974)
($)
(W)
Wegelin/UDA
Survey (1973)
Kuala Lumpur Municipality
Survey (1966/1968)
(%)
(%)
All Urban Households
P. Malaysia (1970)
(W)
below 100
6.83
5.4
9.2
10.7
100 - 200
58.23
52.1
51.5
26.0
201 - 300
21.69
26.3
25.4
20.2
301 - 400
7.23
11.1
12.6
401 - 500
2.01
2.5
7.8
501 - 600
1.61
2.3
601 and above
2.40
0.3
TOTAL
Mean Income
13.9
17.9
100
100
100
100
216
213
203
428
250
2202
13565
($)
Sample size
4.8
Source: Adapted from Ishak Shari (1976), Table 4
-46-
obtained from two surveys, presented in Table 2.7, tend to disclaim
that. The incidence of poverty
here is strikingly similar to that
for the squatter households: the overwhelming majority, too, have
incomes less than $300 monthly. Abraham's survey of tenants at the
low cost Rifle Range Flats in
Georgetown yields results that conform
to the overall pattern of poverty among these groups. 75% of the
households surveyed by Abraham had less than $300 per month; of these
24/
63% had less than $200.--
-47-
Table 2.7: Percentage Distribution of Monthly Household Incomes of Rumah Pangsa
Monthly Income
Ceras Survey
(1974)
(RP) Tenants, Kuala Lumpur
Dewan Bandaraya Record Office Data
RP Jalan
Ceras
RP Jalan
Shaw
RP Jalan
Perkeliling
RP Tun
Razak
TOTAL
0 - 100
1.7
2.79
2.93
2.59
1.93
2.46
101 - 200
21.7
45.49
29.19
31.73
40-37
38.38
201 - 300
35.9
38.30
59.22
50.69
44.29
46.41
301 - 500
28.6
11.54
8.52
13.79
10.99
11.14
501 - 700
7.5
1-30
0.14
1-03
1.64
1.17
701 - 1000
3.9
0.48
0.0
0.17
0.64
0.36
1000 and above
0.7
0.10
0.0
0.0
0.14
0.08
TOTAL
100.0
Source: Ishak Shari (1976), Table 5
100.0
100.0
100.0
100.0
100.0
-48-
Section 2.3: Increasing ethnic convergence in the occupational
structure
Ethnic segmentation in the sphere of labor utilisation in
Peninsular Malaysia is much too complex for us to cover adequately in
this thesis. For our purposes, and within the framework of our discussion of the labor utilisation process, we are interested in only a very
specific issue:
that is, whether there has been an ethnic "convergence"
or "desegmentation" in labor utilisation during the post-colonial
period.
Basically, two dimensions to ethnic segmentation are relevant to our study. First, there was an ethnic segmentation in employment during the colonial period based on the utilisation of predominantly Malay labor in the agricultural sector, and the utilisation of
maily Chinese labor in the urban economy. Second, wtihin the urban
economy itself, the following pattern of ethnic segmentation in employment also prevailed:
In the foreign-dominated corporate sector, absorption into white-collar and middle managerial positions was based on English educational attatinment.
To the extent that non-Malays had better access to
English education than Malays (due to concentration of English schools in the cities) they tended to dominate access to these occupations.
A similar situation also applies to white-collar
occupations in the public sector. However, due to
explicit colonial policy to integrate the traditional Malay aristocratic elites within the system
of colonial rule, a special system of selection of
Malays from aristocratic backgrounds for admission
into the colonial administrative bureaucracy was
instituted. This had therefore resulted in a sizeable presence of Malays in public adminstrative
occupations also.
-49-
On the other hand, absorption into the small capitalist sector is based strongly on ethnic and even
subethnic preferential selection criteria. The
reason for this has to do with the mode of employment of the samll capitalist enterprises. Huang
Tze Lian (1972), among others, has described the
widespread use of the "apprenticeship" system of
employment in the smaller Chinese enterprises,
and noted the "semi-feudal" nature of the informal "labor bondage" relationship involved. The
apprenticeship system of recruiting and retaining
control over labor was historically necessary
during the early colonial days when a "universalized" free-wage labor system had not yet developed, and much of the labor was drawn directly
from fresh immigrants from China. Selection based
on clanship and even kinship networks was therefore important in such a system. The majority of
of these small employers and proprietors were
either uneducated or mainly educated in their own
varnacular languages; the big push of spreading
a common national language (Malay or Bahasa
Malaysia) through the school system since the
1960s may affect the younger generation, but had
little effect on those already out of school. The
need to employ workers who can speak the same language or dialect is thus crucial for these
proprietor-employers.
Because of the predominance of Chinese in terms of
ownership and control over enterprises in the
small capitalist sector, wage employment in these
enterprises tend also to be predominantly Chinese.
Unskilled or manual workers of Malay or Indian
origins therefore tended to be excluded from such
employment, and this had partly contributed to
their relative concentration in the protective
services or their tendency to become general laborers in the public services (public works, railways, public utilities, etc.)
25/
The main question that concerns us is how these patterns of
ethnic segmentation might have changed in large part owing to the changes in the post-colonial pocess of labor utilisation that we have seen.
This raises, on the one hand, the issue of the increasing urbanisation
of the Malay population, and, on the other, a convergence of labor of
-50-
all
ethnic backgrounds in
the urban economy.
From 1957 to 1970, there was an appreciable increase in the
urbanisation of Malays, as Table 2.8 shows. By 1970, 28% of the urban
population was Malay as compared with 21% in 1957.
Although metropo-
litan areas showed a lower Malay population of total population, it
was nonetheless in these areas that the Malay population was increasing most rapidly. In Kuala Lumpur, the Malay proportion of the population grew from 15% in 1957 to 25% in 1970.--
After 1970, with the
rapid pace of rural-urban migration the proportion of Malays among the
urban population has accelrated although accurate estimates are not
available. The Third Malaysia Plan, however, estimated that Malays
formed 30% of the population in the urban areas in 1975, and further
projected that the proportion would rise to 33% in
27/
1980.-
The offi-
cial policy of the government has been to encourage the entrance of
mainly rural Malay into the urban sector of the economy. An indirect
indication of the extent of rapid urbanisation among Malays, especially the in-migration to the largest towns, can be seen from one
observer's comment that "the government.....has to reconsider very
seriously its policy of urbanising the Malays."28
The comment was
made in a study of urban poverty among especially squatter families
of whom rural in-migrant Malays formed an important proportion. It is
probable that the Malay proportion of urban population will continue
to increase with the development of "new towns in large regional agricomplexes" by the government on the less urbanised east coast of
Peninsular Malaysia. On the whole, therefore, it is likely that a
-51Table 2.8: Ethnic Distribution of Population by Urban Size, 1957
Size of Urban
1957
1970
Chinese
1957
1970
10,000 - 20,000
37.9
43.9
50.5
47.2
9.6
20,000 - 50,000
15.7
20.0
72.1
68.0
10.3
11.7
50,000 - 100,000
29.4
33.3
56.6
55.2
10.4
10.2
100,000 and above
15.4
22.6
65.4
60.0
14.9
15.7
All 10,000 and above
21.0
27.6
62.6
58.4
12.8
12.7
Area
I.
Malay
and 1970
Indian
1957
1970
Ethnic distribution (%)
8.1
II. Average annual
growth rate (%)
10,000 - 20,000
2.93
1.28
0.38
20,000 - 50,000
4.20
1.85
3.29
50,000 - 100,000
4.38
3.24
3.31
100,000 and above
5.42
1.87
2.88
Source: Narayanan (1974)
-52-
combination of active government encouragement of Malay urbanisation,
the sectoral shift from agriculture to non-agricultural sectors, and
rural-urban migration has begun and will continue to break down this
particular aspect of ethnic segmentation.
With increase in Malay urban population under these circumstances, it can reasonably be expected that an increasing convergence
of all ethnic groups in the urban economy would take place. Indeed,
that this has already happened can be seen from Table 2.9 which shows
the increasing Malay participation at all occupational levels of the
urban economy. It is instructive to note that while the ethnic distribution is the most even for the "production and related" category, the
increase in Malay participation at the "managerial, administrative,
professional, technical and clerical" category has also been very rapid. Official estimates of the post-1970 trend suggest that the increase has been maintained: from 1970 to 1975, the Malay proportion of
professional/technical occupations rose from 47.2% to 48.5%, administrative/managerial from 22.4% to 32.4%, clerical from 33.4% to 38.7%,
sales from 23.9% to 25%, production from 31.3% to 37%, and service and
others from 42.9% to 48.3%.-9/
In manufacturing alone,
it
has been
found that the Malay proportion grew at virtually every occupational
level, but the pace of increase was highest in the white-collar cate-
30/
gory.-
Further evidence of the trend of ethnic convergence is seen
from Table 2.10 which shows the occupational structure by ethnic
group and urban size from 1957 to 1975. For virtually every urban size,
-53-
Table 2.9: Ethnic Composition by Occupation - 1957 and 1970
1957
M
C
59.3
18.9
6.6
1970
I
M
C
73.7
5.9
14.0
65.6
14.0
19.5
74.5
11.4
7.6
41.0 38.1
11.0
45.8
39.0
12.8
49.2 36.0
8.9
53.5
34.4
10.5
I
Managerial & administrative:
Govt.
admin. & executives
Managerial 2
Professional & Technical
Teachers
Clerical
27.1
46.2
19.8
34.1
49.7
14.9
Sales:
15.9
66.0
16.8
22.8
66.4
10.5
7.3
77.2
13.8
58.1
74.5
Managers, wholesale &
retail
trades
Proprietors, wholesale
& retail
trades
Salesmen & shop-assistants
Hawkwers
/
24.4
59.8
14.1
7.3
71.5
20.3
31.9
16.1
7.4
66.0
15.5
20.2
64.7
14.9
8.6
76.9
13.1
31.3
55.3
13.1
9.7
8.9
Service:
Managers, catering
& lodging services
16.5
Proprietors, catering
& lodging services
Protective
61.2
21.6
79.0
8.4
9.2
78.4
9.3
11.5
88.6
7.2
4.3
89.1
6.0
17.4
61.7
19.7
28.7
55.3
4.9
16.9
26.2
53.9
18.9
34.0
54.9
10.9
Transport
24.6
42.0
45.6
41.7
22.8
15.5
28.4
42.9
50.9
42.9
General laborers
28.2
43.4
27.7
47.4
33.8
18.8
13.8
18.6
7.9
40.6
31.7
28.0
36.6
33.4
Armed services
4/
Others
Production & related:
5/
Supervisors
Agriculture - manager/supervisor
(Source and notes are given on the following page.)
-54-
Table 2.9 (continued)
Source: Wong (1979), Table 7.10, pp.497-98
Notes:
1
Figures do not add to 100% because of the presence of
"others".
The 1970 Population Census includes government executives
In the "clerical" category. Here they have been separated
out and put in the "government administrative and execu-
tive" category to ensure compatibility with the 1957
classification.
2
Excludes managers in distribution trades,
lodging services, and agriculture.
catering and
3/ The 1970 Population Census figure on "hawkers" is too small
out many who are hawkers in the
because it apparently left
unclassifiable category. Interpretation of the figures here
needs some caution.
4/ Since the presence of "others" is significant in the armed
forces both for 1957 and 1970, the ethnic composition
figures given here exclude the category "others" from the
total.
5/
In the 1957 Population Census, miners, transportation and
construction workers were classified separately from the
"production and related" category. These categories have
been included to ensure compatibility with the 1970
classification.
(The above notes were given in the "source" because the
figures were calculated from the 1957 and 1970 Population
Censuses.)
-55-
Table 2.10: Occupational Structure by Ethnic Group and Urban Size - 1970
Source: Wong (1979), Table 7.14, p. 497
-56-
the occupational breakdown for the different ethnic groups is rather
similar. This suggests that no stark ethnic differentials exist in
the occupational structure in the urban areas as far as ethnic cri-
31/ But the
teria are used.-ethnic convergence is still not as complete
as might be thought. In particular,
a substantial decline in vertical occupational
segmentation between ethnic groups has occurred
for the urban economy as a whole, but.....this
has been achieved through an uneven pace of absorption of Malays across different production
organisation sectors. The expansion of Malay
employment at all occupational levels were
found to have been concentrated within the
public sector or in large enterprises,
and consequently,
a situation of one ethnic group predominating the
white-collar or management staff positions in an
organisation with members of another ethnic group
being concentrated in the blue-collar occupations
in the same plant has not occurred.
32/
The concentration of expanded Malay employment in
and large enterprises" is
not surprising
the "public sector
since these are the ones
that have undergone the most vigorous growth and account for a significant extent of the sectoral shift. Besides, these are more likely to
be able to avoid the need (as in the small capitalist sector) to depend
heavily on the employment of one particular ethnic group. Nonetheless
it is fairly clear that the colonial pattern of ethnic segmentation in
labor utilisation has been significantly altered.
-57-
Conclusion
We have now established that the sectoral shifts in the
economy had led to a movement of labor from rural and small urban
areas to the largest towns.
Because of the particular changes
in the
labor utilisation process, this has led to an inequitable income distribution as well as an ethnic convergence in the occupational structure. What are some impportant iplications of these developments for
the housing situation?
It would be reasonable to imagine that the urban population
growth would have some impact on the housing situation. But theoretically, any demographic expansion of the proportion that has happened
in Peninsular Malaysia cannot really explain the deterioration in the
housing situation, let alone a deterioration that takes its form in
the ever prominent inequalities in housing provision and conditions.
When the access to housing is essentially determined by the ability
to pay for it,
it
is
not the number or urban residents that decides
the housing situation. Rather, it is the number of people who need
housing but cannot pay for it that is ultimately the issue.
The first implication for the housing situation that can be
drawn, therefore, is that the increased urban growth (quite apart from
the increase in "native", that is, non-migrant, population) has meant
the growth in the number of people who need housing as separate from
their workplace. In contrast to the metropolitan areas where the separation of housing from workplace is already more or less complete, the
socioeconomic situation in the rural and small urban areas was still
-58-
one that combined to a high degree the "furnishing of housing" with
the "offering of employment". The movement of labor from these latter
areas to the large towns thus increased the need for housing in
particular sense,
Second,
and not simply in
some vague "demographic"
under such circumstances,
this
terms.
any analysis of the urban
housing situation must essentially recognise that wages or incomes
have fast become the chief,
if not the only, source of access to hou-
sing. And hence our discussion of the urban income distribution has
distinguished between different income and occupational groups possessing fairly divergent access to housing based on the inequities in
the incomes. For us to decide whether the wages and incomes of these
different socioeconomic groups can adequately cover the costs of decent housing, we will have to turn to an analysis of the housing
market (to be dealt with in Chapter 3); and a comparison of the costs
of housing with the wages or would then have to be carried out (in
Chapter 4).
A final implication centers on the issue of residential
segregation by ethnicity. We saw above that the influx of Malays into
the urban economy has led to an increased ethnic convergence in the
sphere of labor utilisation. This has increasingly broken down an
earlier pattern of residential segregation whereby the Malay population formed only a small part of all urban residents. What we wish to
find out, and will show in Chapter 4, is whether another pattern of
residential segregation by ethnicity - within the urban housing system
itself - has similarly been broken down. To the extent that for Malay
-59-
labor, as for labor of other ethnic groups, the access to housing
depends on its financial resources, the operations of the housing market will be a crucial determinant of the type and location of its
housing. In that sense, out analysis of residential segregation will
continue with our discussion in Chapter 3.
-60-
CHAPTER 2: FOOTNOTES
1. McGee (1967:18)
2. ibid.
3. There seems to be no good reason why social and historical developments should be characterised as "true", "false", or "pseudo",
etc., the implication being that some particular development can
serve as a "norm" by which to measure the others. Abu-Lughod and
Hay (1977), in their Introduction, shows that urbanisation in the
Third World has existed in an important way historically, and
cannot be seen as something emerging only in the colonial period.
4. The most detailed account is by Wong (1979) which covers both
rural and urban labor absorption.
5. Wong (1979:280), Table 5.1
6. ibid.
7. ibid, Table 5.2, p. 281
8. Ahmad Sidek (n.d.*:30-31), Table 4.2. See also Snodgrass (1974a)
9. Wong (1979:284-309)
10. Wong (1979:263-67)
11. Narayanan (1975), cited in Ishak Shari (1976:2). Also, Appendix
Table 1
12. See Jamilah Ariffin (1978), and Lim (1978)
13. Wong (1979:265)
14. Saw (1972:117). Temerloh in 1970 had only half its 1957 population.
15. Soon (1977:7-8)
16. Wong (1979: 292-309)
17. See for example Mohd. Iwaz bin Abdul Karim (1976), paper presented
at the Conference on Human Settlement for the Rakyat in the Low
Income Group, Kuala Lumpur, May 2-8, 1976.
18. Refer to Chapter 3 (Section 3.3), below, for McGee's comment on
Petaling Jaya
-61-
19.
See especially Wong (1979),
"Conclusion".
20. cited in Rabieyah Mat (1978), Appendix V, Table 1
21. Ishak Shari (1976:2). "This relatively rapid increase in the number of urban poor in the last five years had been partly due to
.the government policy to increase the Malay share in the modern
sector of the economy.....Since the modern sector of the economy
is predominantly urban-based, this policy implies accelerated
urbanisation of the predominantly rural Malay population.
22. Snodgrass (1974b:31-32) compared the income distribution shown by
five different surveys from 1957 to 1973. Three important conclusions reached in this study are:
i. there has been a trend of imcreasing ineauality in the
distribution of personal income (and still more of total
private income) since 1957
ii. size ineouality is greater in urban areas than in rural areas:
it is increasing in both areas, and.,
iii. the share of households living below the poverty line did not
change signigicantly between 1957 and 1970: the absolute
number of such households thus rose.
23.
Sen (n.d.:23),
and Wegelin (1978)
24. Abraham (n.d.:41)
25.
Wong (1979:477-78)
26.
Sidhu (1978:13)
27.
Third Malaysia Plan (1976:150), and also the Mid-term Review of
the Third Malaysia Plan (1979:41)
28.
Ishak Shari (1976:29)
29.
Third Malaysia Plan (1976:80-83),
30.
Wong (1979:496)
31. Wong (1979:502)
32. Wong (1979:519)
Table 4.15
-62CHAPTER 3
THE RISE OF THE MODERN HOUSING SUBMARKET
Introduction
The effects of the labor utilisation process,
as observed
in Chapter 2, may be said to affect the urban housing situation from
the "demand" side of housing. But insofar as a market in urban housing provision exists, it clearly constrains the situation through its
"supply" of housing. In the most apparent instance, if the "supply"
of housing falls way below the "demand" for it, a shortage is bound
to occur with other possible ramifications for the housing situation.
Given the issues we wish to investigate in this thesis,
some aspects of the urban housing market have to be examined in detail.
First, there is the question of the supply of housing strictly in terms
of the number of housing units constructed for sale or rental, or
otherwise provided to those in need of housing. However, because the
supply of housing can fluctuate in different ways (Section 3.2, below)
it is necessary for us also to consider the dynamics by which housing
stocks change. Third, the housing provided has again to be analysed
in terms of the types of housing available since the quality of housing
is closely related to its costs, location, etc.
To facilitate the treatment of the urban housing market in
this chapter, we will construct a typology of urban housing submarkets,
and, then, within the framework of this typology, discuss the above
aspects of the housing market. This, methodologically, will permit us
to show the position of the "modern" submarket vis-a-vis the others
(Section 3.3), and examine the effects of the rise of this submarket.
-63-
Section 3.1: Typology of urban housing submarkets
The urban housing market is neither simply the modern housing market publicised and advertised in real estate sections of the
business papers nor just the undifferentiated market "as a whole"
that it is often taken to be. One would expect the actual picture of
the housing market to be quite different from either of the two indicated above, given the social stratification and income distribution
inequality that exist fo Peninsular Malaysia. It is, therefore, more
accurate to conceive of a "fragmented" market in housing, fragmented,
that is, into "submarkets" that can be distinguished by certain criteria. On the one hand, each housing submarket largely provides housing that is fairly uniform in terms of its costs, location, and
conditions. On the other hand, different urban households, with their
varying needs, resources, and priorities, do bring to bear upon their
selection of housing certain characteristics such as the ethnic composition of heighborhoods, location of housing relative to sources of
employment, the means of access to the housing, etc. As such, one can
expect that certain groups, defined by either of both income status
and ethnicity, will realistically only attempt to obtain housing
through one or a few of the submarkets; in any case, not all of them.
Thus it is sensible to construct a typology of housing submarkets both
according to the characteristics of the housing they provide as well
as the major characteristics imputed to housing by households determining what kind of housing to obtain. Those characteristics, the criteria by which we distinguish housing submarkets in urban Peninsular
-64-
Malaysia,
can be summarised as follows:
i. ethnic composition of neighborhood (Chinese, Indian, Malay, or
"mixed")
ii.
iii.
income status of neighborhood (lower-,
middle-,
or upper-class),
costs of housing, and the means of access and finance to it),
iv. location of housing relative to source of employment,
v. tenure or security, and,
vi. condition of housing and availability of public amenities.
The above list is not meant to indicate a "ranking" of the
criteria in terms of their importance for all households. Middle-class
households, for example, may consider the "income status of the neighborhood" and the condition of housing to be the primary factors in
their housing choice. Squatter families may have a need to locate near
to the workplace in order to minimise transportation costs. But based
on the above characteristics, the following major housing submarkets
can be identified
for the large urban centers of Peninsular Malaysia.
(This typology is generally valid for the large towns, but where a
housing submarket is peculiar to one town, it will be specified so.)
1. Rooming in mixed residential-commercial shophouses: almost exclusively inhabited by Chinese, these usually two or three-storeyed shophouses tend to be among the oldest and most dilapidated, located in or
near to the central business districts of the towns. The houses provide a "shop front" on the ground floor, and rooming on the top
floor(s), having very high density and overcrowding through repeated
subdivision into cubicles that are rented or sub-rented out.-1/
-65-
2.
"New Villages":
these are usually wooden-walled,
zinc-roofed
detached houses which were initially established in the early 1950s
as a result of the "Emergency" to enforce the relocation and concentration of Chinese squatters and resident market-gardening farmers
living at the rural fringe of the towns. "New Villages" are especially
extensive in towns like Ipoh and in and around Kuala Lumpur. The housing is probably under a severe population pressure now because while
the population may have doubled since the 1950s the available land
and housing have not increased. Many suffer from a lack of public
facilities even though in Kuala Lumpur the population residing in
these houses may be as high as 12-15% of the total population of
2/
Kuala Lumpur.-
3. Kampong Bahru rental housing: historically established by the colonial administration as a "Malay reserve" in 1899, it remains the most
important (and symbolic) residential area for Malays in Kuala Lumpur.
The residents in Kampong Bahru account for about 15% of the Malay
population in Kuala Lumpur. Until recently, Malays migrating into the
city have traditionally passed through this submarket. Overcrowding
is also a problem here. And many of the houses are stilted to avoid
monsoon floods, possibly giving the "rural appearance" of this area.4. Government labor lines: first established by the colonial administration to house Indian labor employed at the railways and other
public works, this form of barrack-like housing continues to be inhabited by predominantly very poor Indian laborers. In Kuala Lumpur, the
labor lines are mostly situated near to the railway workshops and
-66-
"godowns"
(warehouses).
Heavily overcrowded,
this housing,
for all
purposes, fits the description of slums. 4
5. Squatter settlements: these "illegal" settlements are fairly widespread in all the major towns, but they are concentrated in and around
the Kuala Lumpur-Petaling Jaya-Klang area where the estimated squatter
population is 400,000 persons
The squatters in Kuala Lumpur form
about 30% of the city's population. Denied public facilities and characterised by generally quite poor conditions, squatter housing nonetheless forms a very important source of housing in Kuala Lumpur,
especially for in-migrating families. Except for a few mixed settlements, all the settlements are overwhelmingly of one ethnic group.
Squatter settlements in Kuala Lumpur tend to be located near to railways, river banks, disused tin mining pools, and in outlying fringe
areas. The Chinese settlements tend to be the oldest, while the Malay
ones the most recent. The former also tend to be the sites of "a multiplicity of tiny workshops". The housing is both self-owned and
rented, and there appears to be an increasing incidence of renting in
the more established settlements but among the more recent and poorer
in-migrant families.-6
6. "Rumah pangsa": these high-rise (or multi-storey) public low cost
housing schemes have appeared only relatively recently although they
are expected to increase as one solution to the squatting problem and
the massive needs of low income families for housing. In point of fact
most of these "low cost" housing is still beyond the means of squatter
families and many poor households. Some flats are operated on a "hirepurchase" basis while others are only rented out.
There have been
-67-
several cases of evicted squatters being promised resettlement in
this housing but not actually obtaining it. The conditions of much of
this housing vary, but some have rapidly deteriorated such that they
-have even been described as "modern concrete slums".-
Most of the
low cost housing are ethnically mixed though there is a tendency for
the majority of the tenants to be Malay families.-9/
7. Factory housing: some large companies or factories have begun to
rent out this densely populated housing to their employees. These
"housing estates" may be owned, leased, or managed on a profit basis
by the companies. Although this housing is not significant as yet for
Kuala Lumpur, it is on the rise in places like Georgetown (Penang)
where the factory labor force has been drawn from rural migrant population. Located near to the factories, this housing often packs up to
six persons into small rooms suitable essentially for only one person.8. Middle-class housing estates: usually semi-detached, terraced or
"linked", suburban, and located in uniform blocks in more peripheral
areas, this is the modern housing referred to earlier. Increasingly
popular and representative of the homeownership aspiration of the white
collar, professional and commercial strata, middle-class housing
estates are the main cause of much of the "residential sprawl" because
they are developed almost entirely by housing developers and real
estate agents who resort to "leap frogging" towards peripheral areas
where large contiguous pieces of land can be assembled at lower costs.
For the residents, the ownership (often on mortgage) and the conditions
of the house as well as the status of the neighborhoods may be the most
-68-
important criteria for choosing this type of housing. The trend is
also towards ethnically mixed housing estates of this kind.-11/
9. Upper-class housing and "bungalows": these consist of both housing
in the traditional residential area for colonial administrators,
foreign businessmen and executives, and top civil servants. Newer
upper-class suburbs are included in this category. The costs of this
housing are the highest in the country, whether for sale or rental.
These upper-class neighborhoods are the most evenly mixed ethnically.-
There may be other less prominent housing submarkets in operation but for our purposes the above major ones will suffice for an
analysis of the "housing market". In the following sections, the
"modern submarket" will always refer to the last two categories of
housing, while the others will sometimes simply be lumped together
as the "older" or more "established" submarkets.
-69-
Section 3.2: Changes in housing stock
Having constructed a typology of the major housing submarkets, it is possible now to analyse the changes of the housing stock
for the different submarkets, and the dynamics involved. What will be
of particular importance are the actual changes in housing stock additions or reductions - associated with the submarkets.
Basically there are three ways by which housing stock changes in urban Peninsular Malaysia, within each submarket and between
different submarkets. The first is the process of "filtering" - change
in housing stock from one submarket to another without accompanying
change in the physical form of the housing. Second, there can also be
a change in housing stock within a submarket through demolition and
replacement.- The third, and most obvious, way by which housing stocks
change is the contruction of new housing units within one or more
submarkets.
In terms of the first process, two types of filtering can be
distinguished: the transition from "middle-class" housing into lower
grade housing with the latter increasingly assuming the form of rental
housing; and the transition of newer owner-occupied squatter housing
into owner-occupied-cum-renting squatter housing. This transition takes
place in more established squatter settlements. Although some middleclass housing has probably "filtered" to lower middle-class families,
it is not very significant as far as changes in housing stock go. One
can conceive of the type of "factory housing" described above as one
form of "filtered" housing. A certain amount of filtering of the
-70-
second type (that is, in squatter :settlements) has occurred. It has
been observed that renting takes place more frequently in older squatter settlements where a considerable proportion of squatters are in
13/
fact tenants.-More recent squatters, especially in Kuala Lumpur,
largely build their own homes or commission their construction although
the poorest among them are likely to be found in the tenant category.Precise data on the extent of this form of filtering among squatter
settlements is unabilable but it is altogether possible that should
the trend of rural-urban migration continue unabated, the incidence of
squatter renting in relatively more established settlements will increase in importance.
The reduction of existing housing stock through physical
demolition is seen most clearly in the case of periodic and often massive squatter "clearances" by the public authorities. There are no comprehensive estimates of the extent of demolition of squatter settlements. It is known, however, that the more centrally-located settlements on private land (rather than public land) tend to be subject to
more demolition and eviction. Between the end of November, 1969 and the
beginning of February, 1971, for example, 2261 squatter households were
15 / Among the
evicted in the Kuala Lumpur area.more recent evictions
was the one carried out by the Penang State Government where 230 squatter houses were demolished, and the families evicted.
These
"clearances" of squatter settlements became more prominent after 1969
or so as land marked for urban development was "recalled" for construction on it. As shall be seen soon, the reductions in squatter housing
may be more than offset by the spate of new squatter house construction
-71-
that occurred especially after 1969-70.
There is also hardly any data available on the number of
houses demolished for any period. But in Penang and elsewhere, centrallylocated shophouses have been systematically demolished to be replaced
by new commercial complexes that do not combine residential with other
non-residential uses. This change in housing stock has often happened
when state "urban re-development" plans have been implemente4
%iithout
the backing of the state government, it has often proved difficult for
private developers to actually carry out any large scale demolition of
this type. Since the pace of the urban re-development programs is
likely to increase in the future-, the problems encountered by the residents in the shophouses are also likely to increase seeing that most
of them are simply left to find alternative housing on their own. In
this respect, their problems bear similarity to those of evicted
squatters.
It is evident from the above considerations that the first
two processes of change in housing stock have not on the whole generated much addition to housing stock for these submarkets; more likely,
net reductions in existing stock have resulted. Squatter construction
may have checked the reduction in squatter housing, but this can at
best be regarded as only partially "stable" housing. Apart from new
construction of squatter housing, most construction of new housing has
been undertaken by federal and state authorities (public low cost housing schemes) and private developers (middle- and upper-class housing
estates).
-72-
Although low cost housing has become more important, it still
falls considerably short of low income housing needs, and, clearly,
short of the construction of middle and upper-class housing. Table 3.1
shows the number of public low cost housing for urban areas from 195374. The total number of housing units constructed annually is rather
low, with the number of units highest for 1968 and 1969. It has been
suggested that "the effort of the Housing Trust was intensified in
the wake of the 1969 election"171 and probably the same can be said of
the pre-election year of 196818/ and perhaps of election year 1974 as
well when low cost housing construction rose again after having fallen
sharply from 1969 to 1973. No exact figures for urban public low cost
housing construction are available for the period 1971-75. The Third
Malaysia Plan stated that "of the total public sector performance about
50% consisted of low income housing in urban areas."
-
If this figure
were correct, that would mean that about 43,050 low cost housing units
were contructed between 1971 and 1975.
But from Table 3.1,
the total
number of urban low cost housing units add up to only 6,699.
Even
assuming a substantial number of housing units unaccounted for, it is
still virtually impossible that public low cost housing construction
for 1975 alone has been so great as to make up the vast difference. In
fact the Third Malaysia Plan gives a figure of only 13,200 units built
under "public low cost housing schemes" (unspecified as to the rural
and urban proportions);--0/
possibly this figure should be higher
allowing for a proportion of the State Economic Development Corporations' and other state projects being low cost urban housing. Nonetheless, a figure of 43,050 units remains a gross overestimate.
-73-
Table 3.1: Estimated Supply of Urban Public Low-Cost Housing,
Peninsular Malaysia,
Completed Ainually)
1953 - 1974 (Number of Units
Source of Funding
State, SEDC or
Municipally Funded
Total
Year
Federally
Funded
1953
120
n.a.
1954
-
n.a.
1955
1956
1957
1958
1959
1960
161
283
722
821
592
114
n.a.
n.a.
n.a.
n.a.
n.a.
60
161
283
722
821
592
174
1961
306
391
697
120
1962
872
101
973
1963
1,945
284
2,229
1964
1,207
222
1,429
1965
1966
1967
1,361
693
490
22
374
-
1,383
1,067
490
1968
2,108
1,282
3,390
1969
6,788
1,683
8,471
1970
2,286
420
2,706
1971
1972
1973
19741Z
2,037
400
160
2,260
887
286
180
489-4
2,924
686
3 340
2,749
TOTAL
25,726
Source: Wegelin,
6,681
(1975),
32,407
p. 13
./ Completed and expected to be completed before 31st December, 1974
2V Selangor State Government and P.K.N.S. only
-74-
The period of the Third Malaysia Plan (1976-80) is the one
for which low cost housing was stressed and a large increase in its
construction projected. A total of 56,800 public low cost units was
targeted, but between 1976-78, however, only 11,395 of these had been
completed (for the whole of Malaysia) with another 30,923 units "under
various stages of implementation."--
Hence it is not possible to have
an accurate estimate of the low cost units constructed up to this
point though the number is likely to exceed that for the period of the
Second Malaysia Plan (1971-75).22/
Even with the increase, it is not certain that all "public
low cost housing" caters in fact to low income and the poorest urban
families. The families living in these low cost housing schemes include
a significant
proportion of lower middle-class families, and on the
other hand some of the poor families are discouraged from participating"
in them because of the regular payments required. More importantly, the
housing itself may not be "low cost" as some cost as high as $15,000
23/
or more.--
The number of applicants for low cost housing meanwhile
has mounted - in the Kuala Lumpur area alone, more than 20,000 applicants are still waiting to obtain low cost housing. Elsewhere the
figures are just as high.--
Thus there is clearly an increase in exis-
ting stock of the public low cost housing submarket, but it is a long
way off from solving the problems associated with low income housing.
Notwithstanding the increases in low cost housing stock,
middle- and upper-class housing dominates as far as new construction is
concerned. The latter housing stock is built exclusively by private
developers in the modern submarket. The increase in this type of housing
-75-
began in the 1960s, and most rapidly after 1970. It is best for us to
consider the proportion of new construction of housing stock of this
type in the context of the emergence of the modern submarket organised
by private developers, real estate agents, and the financial institutions providing housing finance and credit. This will be done in the
next section.
-76-
Section 3.3: The rise of the modern housing submarket
The emergence of the modern submarket in Peninsular Malaysia
can roughly be traced back to the mid-1960s when western-styled suburban, middle-class housing estates began to make their appearance in
the largest towns like Georgetown and Kuala Lumpur-Petaling Jaya.
1967,
By
McGee had already observed that Petaling Jaya was fast becoming
a "middle-class town":
The majority of the town's inhabitants are middleclass bungalow dwellers, largely engaged in white
collar occupations such as banking, business, government service and schoolteaching.
25/
But even then, scarce mention of the role of the private developers in
housing provision was made. One of the very few references to the emergence of the modern housing submarket comes indirectly from a comment
by McGee and McTaggart on the residential growth of Petaling Jaya:
Most of the residential lots were sold off for
bungalow development, to individuals, contractors
and such institutions as the Malaya-Borneo Building Society, usually at prices well below what
the market would have stood.
26/
Apparently, "private developer" was some way off from being
the catchword in the housing sector as it is now. As late as the end
of 1974 there were only about 200 private developers in Malaysia. Two
years later, this number increased fourfold to 892 and it is currently
27/
estimated at 1000.--
These general remarks about the relatively re-
cent emergence of the modern housing submarket are supported by the
information presented in Table 3.2. While in the period, 1955-65, the
modern housing submarket was evidently still not significant enough to
warrant a separate category ("private developer")
in
the table, between
- 77 -/t
Table 3.2: Estimated Number of Houses Built in Peninsula Malaysia
By Various Agencies, 1955 - 1970
1966 - 1970
1955 - 1965
Agency
Type of houses
No. of houses
No. of houses
a
Government:
Housing
Trust
Low cost public
8,938
2.1
21,790
6.4
Government
quarters
23,236
5.5
19,764
5.8
Others
14,502
3.4
12,486
3.6
22,381
2,8
6.5
.
4.3
IN
Others
Private:
Private
Developers
Private housing
MBSB
Private housing
Others:
Others
TOTAL
Source: Rabieyah
Mat (1978)
Table 2.7 (p.
18,317
4.3
14,836
360,883
84.7
251,420
73.4
425,876
100.0
342,677
100.0
71), Table 2.10 (p.87)
-79-
1955-65 and 1966-70, this submarket provided 22,381 housing units.
This was 6.5% of all housing built, and the submarket's share of urban
housing must have been considerably higher though no exact estimate
can be made here. This development within the housing sector is all
the more significant coming in the midst of a considerable decline in
housing provided by the Malaysia Building Society Berhad, and even more,
the rest of private housing ("others") which declined by a third of its
number for 1955-65. Since the Malaysia Building Society Berhad and
some "small time contractors" were fairly important sources of urban
private housing during this period, their combined decline was to have
an important effect on the housing situation which showed a severe
shortage, among other problems, by the time of the 1970 Population and
Housing Census. The role of this rapidly emerging modern submarket in
housing provision from this period onwards is therefore to be stressed.
The growth of "private developer" housing increased even
more rapidly after 1970 as can be observed from Table 3.3. Between
1971-75, the total number of housing units constructed by private developers stood at 64,900, almost three times the number built in the
previous period. At the same time, private developers now accounted for
one quarter of all housing construction, and 37% of all private housing.
The decline in other private sector housing is equally dramatic - from
266,256 units in
1966-70 down to only 108,900 units by 1975.
Aside
from the private developers, the more obvious categories of urban housing are the State Economic Development Corporations (SEDC's) and public
housing. Together they provided only 19,800 units. Considering that an
-80-
Table
3-3:
Number of Houses Built in Peninsular Malaysia, 1971. - 1975
Category
No. of Units built
Public sector:
(86,100)
- public housing schemes (Ministry of
Housing and Village Development)
%
(33.1)
13,200
,1
6,600
2.5
- FELDA rural settlers' housing
15,900
6.1
- other Federal agencies' housing projects
26,200
- Federal institutional quarters (mainly
24,200
- State Economic Development Corporation
and other state projects
for army and police personnel)
Private sector:
10.1
9.3
(173,800)
(66.9)
64,900
25.0
- co-operative societies and individuals
108,900
42.0
Total
259,900
100.0
- private developers
Source: Wegelin (1978),
Note: 1/
Table 3.4, p. 6 7
calculated from figures obtained from above.
-81-
unknown but probably quite large proportion of housing by "co-operative
societies" and individuals really consists of rural housing28/
the
modern submarket has clearly reached a dominant position in urban housing provision.
By 1978, it is obvious that the modern submarket has become
the most important source of urban and private housing. Table 3.4 shows
the number of units completed or "under implementation" for 1976-78.
In these three years alone, 81,628 housing units were completed by private developers as compared with 64,900 units built during 1971-75.
The data also indicates that alone of all the agencies listed in the
table, private developers have not only met their target for the Third
Malaysia Plan, but exceeded it. In contrast, the other agencies have
fallen short of their targets. The situation is consequently one where
the modern submarket wields a great degree of control over the provision of urban housing. Unfortunately, the data in Table 3.4 is for the
whole fo Malaysia so that the total number of housing units constructed
in Peninsular Malaysia alone is not known. But it is unlikely that
Sabah and Sarawak would account for more than a fraction of the total
29/
private sector housing.--
It may be useful to compare the "performance" of the private
developers in the housing sector with the total construction and the
private sector construction of houses in the post-colonial period. Table
3.5 shows the steady and quite dramatic increase in private developers'
share of private sector, and total construction of new housing. The slower growth rate in the construction of housing by private developers
between 1975 and 1978 is attributable to the previous rapid expansion
-82-
Table 3.4: Public and Private Sector Housing Performance, Malaysia, 1976-78
Number of units
planned (1976-80)
Number of units
completed
Public Sector
Number of units
under various stages
of implementation
Public housing schemes -1/
62,200
11,395
30,923
Federal agencies & regional
development authorities
housing programs
53,100
19,574
11,571
Institutional quarters &
other staff accomodation
41,300
18,600
13,807
6,900
1,846
559
57,300
14,521
11191
220,800
65,936
68,051
100,000
81,628
33,300
12,000
2,470
1,759
150,000
45,600
15,200
Sub-total
262,000
129,698
50,259
TOTAL
482,800
195,634
118,310
Sarawak & Sabah Land Development Boards & Jabatan Orang
Asli
SEDCs' housing projects and
programs 2/
Sub-total
Private Sector
Private developer -3/
Co-operative societies
Individual and groups
Source: Mid-term Review of the Third Malaysia Plan (1979),
Table 15-1,
Notes:
1/
includes the provision for SEDCs' low-cost-housing program
2/ excludes the SEDCs' joint-venture housing program
3/
includes the SEDCs' joint-venture housing projects
p.
21 2
-83-
The growth of private developers'
Peninsula Malaysia, 1955 - 1978
Table 3.5:
Private developers'
Table 3.5a:
housing construction,
share of housing construction,
and growth rates,
Peninsula Malaysia, 1955 - 1978
Private Developers
Period
No.
of houses
built
% of total private
sector construction
% of total
construction
Average Annual
growth rate ()
n.a.
n.a.
n.a.
1955 - 65
n.a.
1966 - 70
22,381
7.8
6.5
1971 - 75
64,900
37.3
25.0
1976 - 78*
81,628
60.0
42.0
23.7
8.0
Thble
3.5b:
Average growth rate in total housing construction and private
sector construction, Peninsula Malaysia, 1955 - 1978
Private Sector
Period
No. of houses
built
1955 - 65
Total Construction
Average Annual
growth rate (%)
No. of houses
built
425,876
379,200
-5.3
1966 - 70
288,637
1971 - 75
173,800
-4.3
342,677
-9.6
-5.4
259,900
-8.2
-9.3
1976
-
78*
129,698
Average Annual
growth rate ()
195,634
Source: computed from Tables 3.3, 3.4 and 3.5 above
Note: * figures and percentages are for Malaysia as a whole
-84-
between 1971-75 which left a considerable (surplus) "backlog" of pri-
30/
vate developer housing after 1975.--
Nevertheless, the share of pri-
vate developers in housing has increased tremendously, a trend that is
explained by the increase in private developers' construction even as
the construction of housing by the private sector and the housing sector as a whole have both diminished. And though the data does not
allow distinction between rural and urban housing to be made accurately
it can be inferred from our discussion earlier that the private developers have consolidated their control over urban housing within only
about a decade beginning with the mid-1960s.
-85-
Section 3.4: Some effects of the rise of the modern housing submarket
Now that the growth of the modern housing submarket has been
established, it is necessary to discuss some of the consequences this
rapid growth has brought about. Like all other housing submarkets, the
modern submarket affects the housing situation through the ways in
which it provides housing and the types of housing it provides. Specifically, the modern housing submarket provides housing by developing
housing estates on large pieces of land that private developers and
realty companies are able to purchase and assemble. It has also developed an elaborate system of "means of access and finance" to the housing development and purchase of houses primarily in the form of mortgage, and housing loans. And the submarket has also affected the housing situation in terms of the types and the costs of the housing that
it has constructed. Each of these will be discussed below.
It is common knowledge that in the last decade or so private
developers and realty companies have bought up enormous pieces of land,
some used for commercial-industrial development, and others for residential development. Both the demand for urban land, and the speculation it helped to spawn, caused the urban land prices to rise very
sharply. Only very recently have studies been carried out on the land
market from the 1960s onwards as the effects of the brisk business in
urban land are beginning to be felt in the major urban centers. One
study of Central Georgetown land ownerhip patterns showed the sharp
rises in prices of urban land in the city especially in the late 1960s
and early 1970s. In one middle-class residential area, six miles from
-86-
Central Georgetown, for instance, the price of land rose by two and a
31/
half times within the same year, 1973.--
32/
others,--
The same study, as well as
also showed that it was not infrequent for prices of land
within a city to rise by two to three times during a one- or two-year
period.
33/
--
Indeed, speculation had become so widespread in the urban
land market that an effort to control it was implemented in the form
of a capital gains tax.--
With the prices of land having been so dri-
ven up, just about the only agencies that could afford the purchase of
urban land were the real estate companies and private developers. The
Selangor Properties Berhad, to take a prominent example, has a "land
bank" of some 1,000 acres of freehold land in Damansara Heights, a fast
expanding , middle-class residential area in Petaling Jaya. It also
owns substantial pieces of land elsewhere in Kuala Lumpur and Petaling
35/
Jaya.--
Other large developers, like the Island and Peninsular group,
own sizeable tracts of residential land in places like Georgetown.3 6
Partly because the growth of the modern housing estates required "bridge finance" to clear and prepare residential land lots,
and partly because of the need for "end finance" to help house purchasers buy the houses, the financial institutions have entered the housing market in a very important way. Prior to 1965, the most important
institutional sources of housing finance were the "building societies"
and the Malaysia Building Society Berhad (MBSB). During the period,
1966-70, the MBSB made out housing loans totalling $152.8 million for
37/
the purchase of 14,800 houses.--
Important as the MBSB was then, the
amount lent out was by no means a very big one, and certainly it was
not sufficient for the expansion of the modern submarket to take place.
-87.-
The amount of housing loans steadily increased until by the end of
1976 the toeal sum owed by mortgagers to MBSB stood at $250 million.
By then, however, the single most important source of housing finance
had become the commercial banks. Commercial banks started making out
housing loans in 1965 at a slow pace - in 1968 only 7 out of 32 banks
participated in
38 / But at the end of 1975,
housing finance.--
37 banks
throughout Malaysia had engaged in the provision of housing loans,
joined by 30 "borrowing companies" (finance companies) as well as 59
"39/ The penetration of these financial institu"building societies".-tions into the housing sector can be seen from the fact that housing
loans to private housing increased from $300 million in 1970 (end of
40 /
year) to about $1.5 billion in 1975 (end of year).-- An estimate of
the required housing finance to be provided by these financial insti-
41/
tutions for 1976-80 put the figure at $5,146.8 million.--
Among these
the banks have gained a clear lead in housing finance as shown in
Table 3.6. By 1973 the banks had accounted for almost two thirds of
all housing loans. It is instructive to observe that the ascendance of
the banks began essentially in 1970 - about the same time that the
housing built by private developers began to rise. There is little
doubt that the banks were necessary to and have become an important
"partner"
in the modern housing submarket. From the position they now
assume in housing finance, the degree of control they have over the
urban housing situation can well be imagined. The implications of the
entrance of the financial institutions, particularly the banks, into
the housing market will be discussed more fully in the next chapter.
-88-
Table 3.6 : Percentage Distribution of Housing Finance By Various Sources,
1970 - 1975
Sources
Year
MBSB
Commercial
banks
Borrowing
companies
1970
52
29
9
10
100
1971
48
33
9
10
100
1972
38
46
9
6
1973
27
59
10
4
100
1974
24
62
11
3
100
1975
22
64
11
3
100
Source: M.H. Lee,
cited in Malaysian Business,
Life insurance
companies
(March 1976, p. 10)
Total
99
-89-
As the housing typology in Section 3.1 suggested, the
housing submarkets provide housing of a fairly uniform character in
terms of the types of houses available and the costs of those houses.
Both these aspects of the modern housing submarket will be analysed
now in some depth.
There are of course some variations in the types of houses
constructed by private developers. Within a certain range, however,
these types apply rather uniformly throughout the whole of Peninsular
Malaysia. Here, it is thus sufficient to look at the types of houses
built by private developers in Kuala Lumpur between 1972 and 1976. A
breakdown of the total number of houses built, under construction, or
scheduled for construction in those years is given in Table 3.7. The
data shows that within the period covered, there was "a distincr trend
towards better quality housing" - detached, semi-detached, and doublestorey terrace houses. Single-storey terrace houses formed the largest
single category of houses because they were (and are) the least expensive within that range of housing types. It cannot be verified whether
the "shops" built provide the kind of commercial-cum-residential
uses
that characterises the shophouse renting submarket described in Section
3.1. Similarly the "flats" cannot be assumed to be low cost housing
because elsewhere, in Georgetown for example, the "flats" are nowhere
within the reach of low income families. The "flats" built by private
developers in Georgetown were virtually all high-rise "luxury apart-
42/
ments" .-
This trend "towards better quality" - that is, more
expensive - housing is likely to continue for some time to come.
Table 3.7: Number of Houses Built in Kuala Lumpur By Type of House, January 1972 - June 1976.
Period
Type of houses
units
(completed)
%
Jan. '72 - Jun. '73
units
under construction
%
June '73
units
scheduled for construction
June '73
-
June '76
%
Total
&
5
Single-story,
Semi detached
410
3.9
1860
15.9
4190
15.6
6460
13.2
tached)
760
7.3
1730
14.8
3400
12.6
5890
12.0
Single-story
-terrace
5420
52.0
1510
12.9
7920
29.5
14850
30.3
Double-story
terrace
1440
13.8
4100
35.0
8710
32.4
14250
29.1
Shops
580
5.6
610
5.2
1030
3.8
2220
4.5
Flats
1820
17.4
1910
16.3
1630
6.1
5360
10.9
10,430
100.0
11,720
100.0
26,880
Double-story,
s emi-detached
TOTAL
Source: calculated from Malaysian Business Survey, Malaysian Business (November 1973), pp.16
100.0 49,030 100.0
-
17.
-91-
Malaysian Business (July 1977) reported that though "there is still
good demand for single-storey terrace houses.....developers prefer to
3
concetrate on double-storey units which show better profits." --
Like-
wise, in Penang and Johore, the proportion of "double-storey" units
.44/
remains high.--
What is conspicous in all this is the virtual absence of low
cost housing. There appears to be some beginning state government le-
45/
gislation requiring private developers to build some low cost housing.-Whether that will change the distribution of the types of private housing built in future remains to be seen. In the period under consideration, that was certainly not the case, as the data in Table 3.8 shows.
During the period 1969-74, there was an extremely rapid expansion in
the provision of houses costing between $25,000 and $60,000, an expansion at the expense of houses costing less than $25,000. Significantly,
the number of houses costing over $60,000, too, increase from 1972 onwards after a decline from 1969-71. Three quarters of the houses provided in 1974 cost over $25,000 but even then it is very unlikely that
low cost housing could have accounted for the one quarter of houses
less than $25,000. As is evident from Table 3.9, perhaps only houses,
costing less than $10,000 could be reasonably regarded as low cost
housing in that five-year period. In 1972, the number of houses costing less than $10,000 was a mere 352 or 1.7% of all private sector
housing. At this level of selling price, the estimated monthly repayment suggest that the houses would remain beyond the means of the overwhelming majority of urban low income families. The preponderance of
houses costing over $20,000 confirms the trend of increasing proportion
-92-
Table 3.8: Housing Production, 1969 - 1974, Private Sector
Cost Price
Per Unit
less than 25,000
25,000 - 60,000
over 60,000
Total*
1969
Total
%
1970
Total
%
1971
Total
%
1973
1974
Total
1972
Total
,
Total
%
564.3
49.1
4214
52.1
1915
26.1
1165
83.0
5929
87.2
7424
77.1
81
5.8
466
6.9
1728
17.9
5312
46.2
3347
41.4
4580
62.3
157
11.2
397
5.9
478
5.0
534
4.7
533
6.5
852
11.6
1403
100.0
6792
100.0
9630
100.0
11489
100.0
8094
100.0
7347
100.0
Source: Statistics Department, Social Statistics Bulletin,
peninsular Mlaysia, 1969
71, 1972; unpublished
data 1973, 1974.
*Excludes the "unknown" categories
-93-
Table 3.9: Distribution of Private Sector Housing in Peninsular Malaysia
by Selling Price and Repayment Categories of Housing, 1972.
Selling Price Per Unit
($)
Estimated Monthly Repayment
No. of units
less than 10,000
70.00
253
1.7
10,000 - 15,000
177.00
1337
9.1
15,000 - 20,000
248.00
3198
21.7
20,000 - 30,000
354.00
3896
26.4
30,000 - 45,000
531.00
4288
29.0
45,000 - 60,000
743.00
906
6.1
1132.00-I
880
6.0
over 60,000
TOTAL
Source: Statistics Department (1972),
14758k
Kamal Salih, (
), p.15
Notes: 1: Estimated at 11% average commercial interest rate
for an average repayment period of 10 years
2: Calculated at $80,000
3: Based on approvals, not actual construction;
excludes "unknown" category
I
100.0
-94-
of "better quality housing" mentioned above.
The implications of the above trend for the costs of housing in the modern housing submarket can be judged from the following
table, Table 3.10. On the whole, the selling prices of the different
types of private developers' housing in the towns shown are very high,
even for the least expensive category of single-storey terrace houses.
Moreover, in the largest towns -Kuala Lumpur, Petaling Jaya and
Georgetown - the prices appear to be highest. The prices given in the
table are for 1976 and 1977; they had certainly fluctuated in the
period considered, due to factors such as the increase in building
material costs, shortages of housing for most years (1973 being an
exception) and speculation as rife as that for the urban land market.
Comparative data on selling prices of houses for different years in
Georgetown is shown in TAble 3.11. The consistent and large increases
in the prices of the houses is readily observed. The prices of houses
in the modern submarket seem to be escalating still. In January, 1979,
it was reported that "a double-storey link house today costs nothing
,46/
less than $90,000 compared to about $55,000 a few months back."-With this kind of increase in housing costs, it would be risky to predict the costs in the near future even; suffice it to mention that housing costs in the modern housing submarket will remain very high.
As the data in Table 3.10 shows, rental housing in this submarket has also been very expensive. The rentals, too, have risen, and
there is no reliable data for comparison. The information is essentially an indication of the rentals charged from the 1960s onwards.
What is known from recent accounts and newsreports is that these
-95-
Table 3.10: Average Costs of Houses by Type of House in Selected Towns, Peninsular Malaysia
Average Selling Price ($)
Type of house
Selangor
Kuala Lumpur
Petaling Jaya
Malacca
Johore
Single-storey terrace
22,450
30,000
32,900
30,000 (200)
34,500(150-200)
36,000(250-300)
Double-storey terrace
46,500
45,000
50,000
55,000
56,500(250-400)
61,500(300-400)
Single-storey semi-detached
37,000
50,000
68,000
70,000
85,000
Double-storey semi-detached
Detached
Bungalow
180,000
Perak (Ipoh)
Penang (Georgetown)
75,000 (400)
190,000
Source:
Perumahan, Oct., Nov., 1976
Malaysian Business, June, July, 1977
Goh (1977), p. 1 4
Note:
i. Figures in parantheses show the range of monthly rentals
ii. Average selling prices are obtained by taking the mean
of range prices given
(450-600)
175,000
122,500
-96-
Table 3.11: Simple Price Index for Houses in a Middle-class
Residential Area in Georgetown, 1968-76
Selling Price ($)
A + B
Simple Price
Index
25,000
48,000
100
24,000
27,000
51,000
106.3
1970
25,000
30,000
55,000
114.6
1971
26,000
32,000
58,000
120.8
1972
30,000
34,000
64,000
133.3
1973*
42,000
40,000
82,000
170.8
1974
45,000
60,000
105,000
218.8
1975
50,000
65,000
115,000
239.6
1976
55,000
75,000
130,000
270.8
Year
Double-storey
Terraced (A)
1968
23,000
1969
Double-storey
Semi-detached (B)
Source
Goh (1977), p. 14
Note:
Data based on appraised value of houses at time of transactions
*There is a possible discrepancy here between the prices of the
two different types of houses; conceivably, the price of semidetached houses should be higher even for this year.
-97-
rentals are much higher than rentals elsewhere, in the shophouse renting submarket for example (and this itself has increase) .the rentals in
47/
Often
the modern housing submarket are two to three times
higher than the rentals obtained in
the other submarkets.
Rentals in
the newer housing estates, particularly in Kuala Lumpur-Petaling Jaya
are the highest. Rental housing incidentally includes the renting of
"luxury bungalows" to foreign executives, and the costs may range well
over $1500 to $2000 per month. This rental portion of the modern submarket is limited, but by no means insignificant. It was reported at
the end of 1976 that "the rental market received better support with
the news that oil companies had reached agreement with PETRONAS, thus
indicating that in the early part of 1977 there would be a large number of oil company executives returning to Malaysia."--8/
-98-
Conclusion
In the preceding sections, we have documented the housing
stock changes of the various urban housing submarkets. The overall
situation may indeed be characterised as one of uneven development of
the submarkets whereby the older submarkets have suffered reductions
in housing stock or gained only slightly in sharp contrast to the
greatly expanded housing provided by the modern submarket.
One
exception to the older submarkets, squatter housing, can hardly be
comforting,
it
being the unmistakable symptom of a lack of appropriate
housing for the poor rather than a solution to their problems. Combined
with the above, the inability of most urban residents to compete with
the real estate agents in the urban land market has now given the
modern submarket an undisputed position in urban housing.
There are two aspects of the modern submarket housing that
have yet to be discussed - its costs compared with the urban income
distribution, and its location. We will deal with these in the next
chapter as we assess the impact of the modern submarket's expansion
on the urban housing situation.
* To avoid unnecessary repetition, a more detailed summary of the
findings in this chapter will be provided in Chapter 5 rather
than here.
-99-
CHAPTER 3: FOOTNOTES
1. Kaye (1960) gives a detailed study of the housing and living conditions in a "Chinatown" area in Singapore. Also see Jackson (19 )
for a study of the "Chinatowns of Southeast Asia".
2. An account of the origins of the "New Villages" and the resettlement program carried out by the British colonial administration
is found in Sandhu (1964).
3. Perhaps the most detailed study of Kampong Bahru is found in
Provencher (1971) which interestingly compares the setting there
with that in a Malay rural village.
4. Not much has been written about the labor lines, but some information is given in Sidhu (1978:16-19). As far as the ethnic composition is concerned, Sidhu writes that "the Indian concentrations
in these.....localities are being gradually diluted by the immigration of Malays who have in recent years replaced the Indians
as the largest ethnic group employed by the railways. Despite this
the Indians continue to form approximately half the total population in Sentul and Brickfields." (p.19)
5. The literature is quite extensive. For a historical study that ties
the origin of urban squatting in Malaya to the gravity of the food
situation in the immediate post-World War II period, see Friel-Simon
& Khoo (1976). Other studies are Chan, Lim & Shamsul Bahrin (1977),
Ishak Shari (1976), and Pirie (1976). Often studies on squatting
include proposals for improving the situation as in Lim (1979) and
Wegelin (1978). The estimate is from Wegelin (1978).
6. See the Malay Mail (Nov. 20, 1978) for reference to "squatter syndicates" and Ishak Shari (1976:9) on "opportunist squatters" and
their role in renting.
7. Abraham (n.d.:19-20) on hire-purchase plan in Penang. A survey of
the Cheras Road Flats was carried out by Toh (1977).
8. Lim (1979:64) describes the flats as having rapidly turned into
slums.
9. For example, see Abraham (n.d.:34).
10. Studies on specifically factory housing are virtually non-existent.
But studies on factory tend to contain some reference to the very
congested conditions. Some houses even operate on a "rotation"
basis: workers on different shifts occupy the rooms at different
times of the day. See Jamilah Ariffin (1978) and Lim (1978). The
former found two main problems with factory housing in Penang: a
high degree of overcrowding ("in a small house consisting of three
rooms, it is very common to find not less than 15 occupants"), and
no proper household amenities. (p. 18)
-100-
11. This is helped in part by government-fixed quotas for Malay homeownership; see for example New Straits Times (Dec. 20, 1978) on
the Johore State Government's stipulation of 40% of all private
developer housing to be allocated ("set aside") for Malays.
12. "By 1970, the zone embracing Kenny Hill, Damansara Heights, and
Lake Gardens was occupied by Chinese (35%), Malay's (35%) and
Indians (17%), while the European element accounted for (about)
13% of the total." Sidhu (1978:19). He adds that "irrespective of
race, English is the lingua franca, and the life-style is uniformly
sophisticated and westernised."
13. Pirie (1976:10-11). Kamal Salih (1976:30-31) estimates that squatters who rent are about 58% of all squatter households in Kuala
Lumpur.
14. ibid.
15. National Operations Council, Malaysia (1969:10)
16. National Star (July 29, 1978) includes a statement by the Chief
Minister of Penang to the effect that "the government would not
tolerate illegal housing on state land."
17. Rabieyah Mat (1978:85)
18. See Abraham (n.d.:13-14) for an account of the "politics of public
low cost housing" in Penang just prior to the 1969 elections.
19. Third Malaysia Plan (1976:332)
20. ibid.
21. Mid-term Review of the Third Malaysia Plan (1979:212)
22. ibid. See Tables 3.3 and 3.4 below.
23. New Straits Times (Jan. 18, 1979) reported on a program of "low
cost" housing, around $15,000 per house.
24. ibid.
25. McGee (1967:154). Description of Petaling Jaya is in pp. 151-54.
26. cited in Dwyer (1975:100)
27. New Straits Times (Jan.
18,
1979)
28. Wegelin (1978:67)
29. An arbitrary figure of 10% is given in Wegelin (1978:68)
-101-
30. Malaysian Business (Mar. 1976):"Private developers chalked up a
backlog of 21,500 housing units at the close of 1975."
31. Goh (1977:13)
32. See Goh (1976, 1977) and Goh & Evers (1976).
33. ibid.
34. A Land Speculation Tax was passed in 1974 imposing a 50% tax on
profits of $200,000 and above; progits from land dealings after
two years were exempt. In 1976 this tax was replaced by the Real
Property Gains Tax; see Goh (1977:39)
35. For a report on the Selangor Properties Berhad, see "Stock of the
Month" in.Malaysian Business (July 1977)
36. For a report on Island & Peninsular, see Malaysian Business (June
1977)
37.
Jegatheesan (1976:52)
38.
Rabieyah Mat (1978:84-85)
39. Jamal- Mohamed (1976:4)
40. Malaysian Business (Mar. 1976)
41. Perumahan (Dec. 1976/Jan. 1977)
42. Malaysian Business (June 1977)
43. See also Perumahan (Aug. 1976, Dec. 1976/Jan. 1977)
44. ibid.
45. Cf. fn. 11, supra.
46. New Straits Times (Jan. 18, 1979)
47. Goh (1977:18-19)
48. Malaysian Business (June 1977)
-102-
CHAPTER 4
THE IMPACT OF THE MODERN SUBMARKET ON
THE URBAN HOUSING SITUATION
Introduction
The preceding chapter has established that the modern
housing submarket has been able to rise to a position of dominance
and control over the urban housing market wihin only a decade or so of
its emergence in the post-colonial period. That rise has brought on a
spate of new construction by the modern submarket which has increasingly assumed an even greater proportion of private sector housing
in the urban areas. Some of the effects of this rapid rise, such as
the increase in land prices and land speculation, have also been examined.
In this chapter, we wish to assess the impact of the rise of
the modern submarket on the urban housing situation. The main issue
that concerns us here is really how the modern submarket has altered
the housing situation, or in fact contributed to its deterioration.
The specific components of this impact will be spelled out in the
following sections, and need not be stated here, No conclusion will be
provided in this chapter since a summary of the results of our analysis
in this chapter will be given in the conclusion of this thesis.
-103-
Section 4.1: Housing "boom" and deterioration
At the same time that the spate of construction by the
modern submarket has produced something of a "boom" in
its
housing
provision, there has also been a steady deterioration of the.urban
housing situation. How is this seemingly paradoxical occurrence of
both a housing "boom" and detrioration together to be understood? This
is the question that we will deal with in this section, and it is
through an examination of this particular issue that the impact of
the modern submarket can perhaps be best grasped.
The obvious way to begin such an analysis is to determine
who or which income groups have managed to gain access to the housing
built by private developers, and through what means of access. Thus it
is necessary first to compare the urban income distribution with the
costs of housing. In 1970, recall, 57% of the urban households in
Peninsular Malaysia received monthly incomes of less than $300, and
a further 20.4% had between $300-499.-
The proportion of households
in the largest towns with these levels of income was just as high: 53%
in Kuala Lumpur and 70% in Georgetown. Only 14.5% of all urban households had between $500-999 per month while a mere 8.2% had monthly
incomes exceeding $1000.
To obtain an idea of which groups can in fact afford the
costs of housing (for rental as well as homeownership) we can look at
the average rents that these different income groups currently pay.
Table 4.1 provides some data on the average household rents by different income categories. It will be observed that though the lowest
-104-
Table 4.1: Household Expenditure on Housing by Various Income Groups,
Urban Peninsular Malaysia, 1973
I Total Av.
Income
No. of house-
Average Exp.
group($)
holds
on rent ($)
Expend.($)
below 300
% of Expend.
on rent
1118
47.4
38.70
304
12.7
300-499
601
25.5
65.20
548
11.9
500-999
425
18.0
102.12
1057
9.7
1000 and above
215
9.1
247.42
1963
12.6
TOTAL
2359
100.0
75.91
606
12.5
Source: Department of Statistics Household Expenditure Survey,
(Preliminary figures), cited in Rabieyah
Note: Rent here is
Mat
1973
(1978), Table 5.16, p.232
"gross rent" and includes fuel and power costs.
-105-
income groups obviously pay the lowest absolute rents, their expenditures already represent the highest proportion of household budgets.
It is very probable that the actual rents paid (and hence the proportion of household budget allocated to rent) are much higher. For one
thing the survey (see Table 4.1) does not indicate tenurial differentiation within each income group. Thus the presence of households who
pay no rent, owner-occupiers for example, may have lowered the rents
on the whole. Moreover, the proportion of household income spent on
rent appears to be unduly lower than the usual estimates by other
2/
studies on housing which put the figure closer to almost 20%.-
In
Georgetown, for instance, the 1977 rents in shophouses were estimated
at $70-80 per month per room which would be almost 25% of a household
income of $300. -3/ An unusually high proportion was estimated by the
Malayan Trade Union Congress when it
recommended a "minimum wage rate"
of $229 for a worker heading a five-member family; of this wage, $89
or 38% was marked for rent (utilities
included).-
Precise estimates of different groups' "ability to pay for
housing" are not obtainable, but it is fairly safe to think that the
lower income groups cannot pay much more than what they currently
allocate to:housing expenditures. One study has cited a survey of industrial workers in Penang which claimed that more than 50% of the
workers could afford a rent of only $45 or less per month. (But it is
not known to us on what basis this figure of "affordability" has been
5/ Indirectly,
though, the level of ability to pay of low
arrived at.)-
income groups can be assessed from the "poverty-line income" concept
-106-
adopted by the Malaysian government. The poverty-line income is
essentially the amount that a household requires to satisfy "minimum
nutritional and non-food requirements"; in other words, for "minimum
61 For
subsistence".-
a six-member family in the urban areas in 1973,
this subsistence level income was estimated to be $225.-71 However, it
has been argued that the poverty-line income should realistically be
closer to $60 per capita per day in the larger towns.-8/ Here we cannot ascertain what the exact subsistence level income should be even
though it does appear that $225 per month for a six-member family
(an average-sized family) is somewhat underestimated. Be that as it
may, the poverty income presumably allows for housing that is "minimal"
and surely nowhere near the quality, and hence the cost of modern
submarket housing. The majority of the urban households, as we have
seen, have less than $300 per month,
not substantiallt- above the
poverty-line income. It can reasonably be suggested that most of the
low income groups cannot afford much higher rents than what they are
already paying. One can in fact conclude that based on income as the
only source of access to housing, almost all of the modern submarket
housing is completely beyond
their reach.
Indeed, judging from the urban income distribution and comparing it with the extremely high costs of modern submarket housing,
it would be reasonable to think that only the highest income group
(over $1000 per month and 8.2% of all urban households) can really
afford homeownership in the modern submarket without incurring great
financial burden. This being the case, how has the modern submarket
managed to expand as rapidly as it did?
-107-
Clearly, however, monthly incomes are not the sole means of
access to this housing. As we noted in Section 3.4,
the growth of
the modern submarket was aided by the corresponding expansion of the
role of financial institutions in housing finance. As one observer
put it, these institutions act as "financial intermediaries" between
housing developers and purchasers: in other words, between costs of
housing and the incomes. Even though the expansion of these financial
intermediaries suggests the importance of their role, the full implication of the mortgage and housing loan system has seldom been
stressed.Nevertheless, there is no question as to their importance,
as the following statement shows:
The Government, through Bank Negara Malaysia,
introduced guidelines to commercial banks and
finance companies effective October 1976 to
ensure that adequate financing on reasonable
terms is available to housing buyers. Under
these guidelines commercial banks and finance
companies are required to channet-at least
10% of their net increases in their loans and
advancing as housing loans to individuals. For
loans not exceeding $200,000 the maximum interest chargeable is 10% per annum. From May
1977, interest rate on new loans was further
reduced to either 9.0% or 1.5% per annum above
the prime rate. These measures resulted in a
significant increase in the amount of loans
approved by commercial banks and finance companies which rose from $642 million outstanding at the end of 1975 to $1.5 billion at
the end of 1978.
_9/
Government "guidelines" to financial institutions on the matter of
housing loans date back to 1965 but it is beyond our scope to analyse
them in
any detail. Suffice it to mention here that in the main those
guidelines have aimed at expanding credit opportunities for potential
homeowners.
-108-
The mortgage and housing loan system has permitted homeowners to purchase houses on a low-down-payment,
repayment basis.
moderate-
to long-
Usually the down-payment amounts to one-third of the
selling price of the house, and the repayment schedule about 10 years
or more. Such a system allows income groups of at least $500 monthly
(probably significantly higher) to purchase houses. The growth of the
secondary and tertiary sectors in the urban centers, as we have seen
in Chapter 2, effected an increase in white-collar, professional and
middle-class groups among the occupational and income groups in the
urban population.
Their higher "ability to pay",
aided by the mort-
gage and loan schemes, has therefore permitted them to buy the houses
provided by the modern submarket. For these groups the financial institutions can indeed be seen as "intermediaries" between housing costs
and monthly incomes. Hence, a conjuncture of government policy, expansion in the role of financial institutions, and increase in the middle
and upper income strata has essentially succeeded in producing a
"boom" for the modern submarket in post-colonial Peninsular Malaysia.
In this context, one can thus understand the tremendous growth in the
modern housing submarket.
If the expanded loan and mortgage opportunities have in
fact managed to bridge the gap between costs of housing and incomes
for the middle and upper classes, it is pertinent to ask whether
those same opportunities have reached the low income families. Assuming that a low income family (household income at $300 monthly)
attempts to purchase a house costing $20,000 (the cheapest type), a
down-payment of about $7000 would have to be made, and a loan of
-109-
$13,000 taken out. The difficulty faced in
down-payment is
trying to make a $7000
virtually insurmountable for such a family. On top of
that, repayment of the loan would constitute an immense problem. If
for instance, we take the interest to be just an average of 5% per
annum (between 0% and 9%),
to be repaid over 20 years (the longest
period shown in Table 4.2) a $13,000 loan will necessitate a monthly
repayment of close to $100. For the majority of low income families,
this repayment represents between at least one-third to one-half of
their monthly incomes. The repayments might in fact be higher because
the financial institutions certainly do not make interest-free loans
and more likely charge nearer 9% than 5%. Comparing this with the
rents currently paid by these low income families, it is quite evident that any repayment at that level would constitute an intolerable
strain on them, and can be sustained only at the expense of other
necessities required by the.
The difficulty of taking loans of this amount for low income
families can be demonstrated in another way. One survey has found
that the "hire-purchase" plan operating for "low cost" flats in
Penang requires only monthly payments ("rents") of $40 for the first
10/
two years, and $32 for the next twenty-three years.-- This plan was
to facilitate the ownership of flats among the tenants over 75% of
whome had household incomes of less than $300 per month. Recently, it
has been reported that over 60% of these tenants were in arrears of
payments,
11/
financial difficulty being the prime reason.-
If such a
plan as this, with virtually no mortgage and interest repayments involved, has been unable to work because the tenants are unable to pay
-- L-LU-
Table 4.2; Monthly Repayment Scale on Housing Loans at Various Interest Rates and Years of Repayment
o:
)
11.5%
9
O5%
10 yrs
15 yrs
20 yrs
10 yrs
15 yrs
20 yrs
10 yrs
15 yrs
20 yrs
10 yrs
15 yrs
41.67
27.78
20.83
53.96
40.14
33.43
64.93
51.69
45.64
72.30
59.60
58.33
38.89
29.17
75.54
56.20
46.81
90.90
72.37
63.90
101.20
83.40
83.33
55.56
41.67
107.92
80.29
66.87
129.85
103.38
91.29
144-50
119.10
166.67
111.11
83.33
215.84
160.57
133.74
259.70
206.77
182.58
289.00
238.20
250.00
166.67
125.00
323.76
240.86
200.61
389.55
310.15
273.87
433.50
357.40
333.33
222.22
166.67
431.68
321.14
267.48
519.40
413.53
365.16
578.00
495.60
: Rabieyah Mat (1978), Appendix VI
-111-
the relatively low rents, it can well be imagined what great difficulty low income families will encounter in availing themselves of
housing loan "opportunities" offered by the financial institutions.
And, finally, the extent to which credit opportunities
serve very limited purpose in helping low income families to purchase
houses can be seen from a recent program of the government's to try
to place low cost homes within the reach of one income group - those
with monthly incomes of about $500. The program plans to provide a
source of both down-payments and loans for purchasing houses costing
about $15,000. While the down-payment can be drawn out of the Employees
Provident Fund (EPF), "at a monthly repayment of $148 the whole loan
can be settled in 15 years."--/ Not only is $148 one-third of $500, it
is more than twice the current average rent paid by families in the
$300-499 income category (Table 4.1). The viability of the program is
at least questionable. Furthermore, the condition that the down-payment be drawn out of the EPF makes certain that a large number of
families
(or workers) not covered by the EPF do not qualify. For
those who do, however, the implication of drawing out sizeable sums
from the EPF for their future has to be regarded quite seriously.
In much the same way, rented housing in the modern submarket
is closed off to low income families. The "luxury bungalows" were of
course not built with them in mind. But the rentals for the cheaper
housing remains prohibitive for these families, and rented housing is
consequently no alternative to homeownership. The rents charged are
typically at least three to four times as high as rents in other
-112-
submarkets. Here the issue of "financial intermediaries" does not
even arise. And in the absence of subsidies from the government or
some other agency, the low income families are simply unable to
13/
afford rentals that may even exceed their entire incomes.-The prospects of homeownership in the modern submarket for
low income families are not bright, to say the least. At their current income
levels, housing costs would have to be reduced to about
one-third or so of the costs of the cheapest type of houses for ownership to reach the low income groups in any meaningful way. Needless
to say, reductions in cost of this kind and this magnitude are rarely
ever made. The trend "towards better quality housing" appears to be
continuing, and, if anything, the costs of housing provided by the
modern submarket have escalated. Perhaps about 1% of all housing built
by private developers is all that is within the reach of low income
families. For all purposes, this 1% is "negligible" in the face of
low income housing needs.
How can these considerations help to explain the deterioration of the urban housing situation accompanying the "boom". First,
it is clear by now that the low income families are completely "priced
out" of the modern housing submarket. Unlike the higher income groups
who have found in mortgages and loans the mechanism that enables them
to purchase houses, the low income groups, at their subsistence or
near-subsistence level incomes, can afford neither rental nor homeownerhsip. Second, in its rise to dominance in the urban housing
market as a whole, the modern submarket simply "resolved" the difference between low incomes and high costs of housing by not constructing
-113-
houses for those who cannot pay for it. To the modern housing submarket, housing appears as a commodity - not necessity - and in that
sense, unlike some of the other submarkets, the modern submarket
engages in housing development and construction exclusively for the
realisation of profit, and maximum profit at that. Finally, having
been so completely priced out of the modern submarket, the low income
families have recourse only to more established and older submarkets
in their search for housing.
For those families already residing in the older submarkets,
being "priced out" largely means that most will remain in their current residences. But those families beginning their search for urban
housing either as in-migrants or because demolitions, for instance,
have rendered them homeless, also must turn to the older submarkets.
We have seen from our discussions on housing types and the changes in
the housing stock that not only are the older submarkets usually more
dilapidated, their housing stock has also suffered net reductions or
else increased only marginally. Besides, most of the new housing construction in the urban areas has been undertaken by the modern submarket. The increase in the number of low income families seeking housing
in the older submarkets have thus caused (in an immediate sense) the
problems of overcrowding, slums, squatting and housing shortage to
worsen. It is in this context that the effects of the urban growth in
population can be best seen - not as fundamental demographic causes of
the deterioration in the housing situation as such but only as factors
which have compounded a severe problem.that was already existing.
-114-
Section 4.2: Residential segregation by class and race
The housing crisis in urban Peninsular Malaysia is
not
confined to problems of shortages, overcrowding, slums and squatting, but includes as well the persistence of residential segregation by ethnicity as we have suggested from the outset. The problem
of a fairly rigid pattern of residential segregation by ethnicity
dates back to the colonial period in Peninsular Malaysia when a
distinct differetiation by race in the sphere of labor utilisation
led to a corresponding differentiation in the shpere of labor reproduction, that is, in housing.
Chinese labor, which was the earliset to be absorbed into
the urban economy, found its residence chiefly in the oldest sections
of the towns. There the "shophouse renting" submarket grew to accomodate its needs. Similarly the utilisation of Indian labor in a lot
of the "public works" led to the housing of Indian workers in the
labor lines provided by the colonial adminstration. The bulk of the
Malay labor force was at this time largely confined to the agricultural sector, and the entrance
of Malays into the civil service
was only in its beginning stages in the later part of the colonial
period. In a city like Kuala Lumpur, the Kampong Bahru "reserve"
became the most important residential area for Malay families. Towards the latter part of the colonial period, upper-class mixed
enclaves began to appear with their residents being mainly members
15/
of the foreign and local elites.--
In short, as McGee pointed out,
-115-
"the end product of the colonial period was to freeze the various
communities in distinct quarters; and it is this basic pattern which
persists until this day."-
6
/
But in the post-colonial period a major development took
place which might have been expected to alter the residential segregation pattern in the large towns. This was the influx of Malays
into the large towns, especially after 1969, and the utilisation
of their labor in virtually every level of the urban economy - from
the top civil service positions and white-collar occupations down
to the blue-collar occupations. While the first two absorbed the
Malays in increasing numbers, it was nevertheless the last occupational category that took in the largest number of Malays (as is the
case with all other communities, excepting non-Malaysian residents).
This development led essentially to an increasing convergence of the
three main racial communities - Malays, Chinese, and Indians - in
the sphere of labor utilisation. This has, however, not led to a
corresponding blurring of ethnic differentiation in the sphere of
housing to any significant extent.
It is the aim of this section, them to account to the
persistence of racial segregation in urban housing in post-colonial
Peninsular Malaysia. Moreover, since the modern submarket has featured so prominently in the housing crisis, it would be useful to
see if it has had a considerable impact on the pattern of residential segregation by race. Hence this section will extend on the
previous discussion and attempt to assess how
the rise of the
-116-
modern submarket might have affected the residential segregation.
Our focus will be on three things:
i.
the spatial location of housing built by the modern submarket
in
relation to other submarket housing,
ii. the residential circuits of different income ethnic groups
through the various submarkets, and,
iii. the role of the modern submarket in lessening, maintaining or
exacerbating the pattern of residential segregation by race.
Although the following discussion will make use of data on primarily
Kuala Lumpur, where the problem is perhaps the most severe, it will
be applicable to urban Peninsular Malaysia as a whole.
The location of the more established housing in Kuala
Lumpur is shown in Map 1. The map shows that the housing provided
by the different submarkets tend to be spatially separated - the
shophouses in
in
the "Chinatowns", the labor lines for Indian workers
Sentul and Brickfields,
the Malay residential areas of Kampong
Bahru, Kampong Dato Keramat, and Kampong Kerinchi, and the upperclass housing around the Kenny Hill-Damansara Heights-Lake Gardens
triangle. Kampong Ayer Panas is a predominantly Chines "New Village";
other "New Villages" lie on the outskirts of the city not shown in
the map. The squatter settlements, both older and newer
ones, are
shown in Map 2. The more centrally located settlements tend to be
older (and predominantly Chinese) while the newer ones are further
away from the center of the city. The distinction between older and
newer ones is, unfortunately, not made in the map. Low cost housing
MAP I : KUALA LUMPUR -MMAJOR RESIDENTIAL AREAS
4
(SOURCE - SIDHU
(1978.11),
MAP 2-1)
MAP2:
KUALA LUMPUR -SQUATTER
AREAS 1970
GOMBAK
5
SE
I
I
I
I
I
4,
-
SOUTH
%
I
P
,
/
4....,
CHERAS
SUNGEl
BESI
PREDOMINANT
COMMUNITY GROU
w
MALAY
CHINESE
INDIAN
0
I
MIXED
1
2
3
4
5MI.
md
(SOURCE - SIDHU
(1978:67), MAP 6-1)
-117-
17/
has tended to occupy fringe areas like Ampang and Cheras.--
(In
Georgetown, low cost flats, too, are found several miles out of the
central district - Rifle Range, for example.) The two maps together
describe more or less the "baisc patter" of residential segregation
referred to by McGee.
Where does the modern submarket housing stand in relation
to housing provided other submarkets in terms of its location? The
answer is given in Map 3. Here it can be seen that middle-class
housing estates built by private developers are almost without exception some distance away from the main town center, and from other
housing. Since the housing estates
require large contiguous pieces
of land to be developed, it is not surprising that private developers
have chosen to construct new housing some distance away from the
central areas where land prices are the highest. Most of the new
housing estates are in fact located in Petaling Jaya (often considered Kuala Lumpur's "satellite town"). Dwyer may have caught the
essence of the pattern of housing location in the city when he observed that "a situation.....arose which was the very antithesis of
rational planning: workers moving each day from Kuala Lumpur to factory jobs in Petaling Jaya and executives and civil servants travelling in the opposite direction, from their residences in Petaling
,,18/
Jaya to offices in Kuala Lumpur.'--
(A similar expansion of new
housing estates on the outskirts of cities continues to take place
19/
in Georgetown, Ipoh, Malacca, etc.)--
Thus we find that hardly any overlap has occurred among
submarkets in the location of the housing that they provide. There
MAP 3: KUALA LUMPUR - HOUSING ESTATES
EASTERN G"D
TAMAN KOK LIAN
TAMAN SPRINGFIELD
SELAYANG GARDEN
"'WA LI TOWN
TAMAN KEPONG
KEPONG BAHRU
JINJANG ESTATE
BUKIT BUNNY
ALAN
,,
S
'4
9.
SETAPAK
GARDEN
KUCH
DAMANSARA
TO'
CHE
SECTION 17
SOUTH EAST ASIA
PARK
PARAMOUNT GARDEN
TAMAN BAHAGIA
BAH SENG GARDEN
TAMAN MIDAH
YULEK HEIGHTS N
TAYTON VIEW
TAMAN MUTIARA
FEDI
HIG}
(SU
TAMAN JAYA
SALAK SOUTH GARDEN
TAMAN SIPUTEH
PUC
FAIRVIEW GARDEN
(CA
LIAN HOE GARDEN
TAN
HAPPY GARDEN
CONTINENTAL PARK
TAMAN GREENWOOD
UNITED GARDEN
OVERSEAS UNION GARDEN
-
FEDERAL TERRITORY BOUNDARY
FORMER KUALA LUMPUR
MUNICIPAL BOUNDARY
MAJOR ROADS
o
(SOURCE-
:ILD)
LAI GARDEN
1
2
3
4
5M1.
MALAYSIAN BUSINESS, NOV. 1973, p.19) .
-118-
seems to be no particular and neccessary reason, conceptually, why
different submarkets cannot provide housing that overlap spatially.
But in the case of uban Peninsular Malaysia the distict pattern of
segregation among different submarkets is largely explained by historical reasons - in particular the colonila labor utilisation process.
In order to get a fuller picture of residential segregation, it is necessary to consider the residential circuits of different income ethnic groups. The housing submarket typology, based
to a large degree, on two criteria - income and ethnic characteristics of neighborhoods - suggests that the circulation or urban families in the housing system fragments along first class (or income)
lines. This fragmentation can be drawn primarily between middleand upper-class housing on the one hand, and lower-class housing on
on the other, mainly because the former consists of homeownership
as the chief tenurial category while the latter is much more restricted to renting (and even sub-renting). As we have shown in the earlier section, the "pricing out" of the lower income families from
middle- and upper-income housing submarkets has been almost total;
consequently, there is good reason for drawing the class segregation
fairly rigidly. As far as the middle- and upper-classes are concerned
their residential circuits are essentially confined to middle-class
and upper-class residential areas.
There is
very little
of any
circulation of these classes into or within the other submarkets.
The converse also seems to hold true.
Lower income families
-119-
in search of housing traverse the older submarkets and newer ones
such as public low cost housing and squatter settlements, and are
basically confined to them. Some intergenerational mobility certainly must have occurred that has allowed some low income families
to move into middle-class housing. There is no evidence for believing that this trend has been significant at all.
The residential circuits show fragmentation along ethnic
lines as well although again there are differences between middleand upper-class housing and lower-class housing. Within the upperclass housing interracial mix is basically the norm while for
middle-class housing, the trend is towards more mix. However, due
to historical reasons that have been mentioned, the older and more
established submarkets (also low income) have been rather rigidly
fragmented along racial lines. The circulation of low income families, confined as it is to these submarkets, has therefore been
subjectred to a greater degree of racial fragmentation. Based on
the above considerations, a likely picture of lower income residential circuits is shown in Figure 1. Public low cost housing appears
then as the one important area of racial convergence, but for the
most part, the residential circuits of different groups do not
overlap.
We are now in a position to assess how the rise of the
modern submarket has affected the pattern of residential segregation.
In general it is new housing - middle-, upper-class, and public low
cost housing - that has had a considerable degree of racial
-ILU-
Figure 1: Residential Circuit of Low-income Groups
Malay Migrants
Kampong Baru: renting rooms
I
Chinese Migrants
Indian Migrants
New Villages: kinship sharing
Labor Lines
Shophouses: renting rooms
r]
Established Malay Squatter
Settlements: rent ing rooms
Established Chinese Squatt E
Settlements: renting rooms
Newer Malay Squat ter
Settlements: owner occupier
Newer Chinese .Squatter
Settlements: owner occupie rE
Establish ed Indian Squatter
Settlemen ts: renting rooms
'I
Lower Middle-class Housing
Estates: mortgage
Public Low-cost Housing:
rent or mortgage
Newer Indian Squatter
Settlements: owner occupier
-121-
"desegregation". The more general point can be made that the new
housing, because it is not simply an increase in older submarket
housing stock, has been able to break out of the older pattern of
residential segregation associated with the colonial labor utilisation process. Among the new housing submarkets, though, the modern
one is the one that has undergone the most vigorous expansion. The
upper-class housing remains limited, and public low cost housing
has yet to show any sizeable growth. If any alteration in the pattern of residential segregation is to take place in a significant
way, it would clearly have to occur through the modern submarket.
The modern submarket has brought about a considerable
degree of residential interracial mix in the middle-class housing
estates precisely because access to it is based almost entirely on
the financial means of its residents. The housing that the modern
submarket has constructed is in no way predicated upon factors such
as the proximity of residence to workplace (within city limits). As
Dwyer has already pointed out, middle-class housing estate dwellers
generally live quite far from their workplaces (by choice). The fact
that the financial means of residents overshadow all other factors
in determining access to the housing has allowed the modern submarket not to be ethnically bound. Consequently the influx of Malay
white-collar workers into the major urban centers has also resulted
in their entrance, along with others, into the middle-class housing
estates. In this respect, and with particular reference only to the
modern submarket, Vance's observation is correct: "capitalism
-122-
develop(s) a geography of residence emphasizing the notion of the
ethnic melting-pot but with economic segregation.
-
But whereas the modern submarket has brought about a
lessening of residential segregation by ethnicity in the housing it
provides, it has affected the pattern of segregation in other submarket housing in the reverse manner. To begin with, the modern submarket might be said to engage in and promote an extremely rigid
segregation by class. The expansion of middle- and upper-class housing at the expense of other urban housing, and the subsequent
"pricing out" of low income families have resulted in an increase
in
residential segregation by race in
the other submarket housing -
if only because low income families have been forced to overcrowd
existing older submarkets to obtain their housing. It can be argued
that "priced out" families could have essentially crowded into
neighborhoods different in ethnic composition from their own background. But given the history of racial tension in the country, it
is not surprising that cultural and ethnic criteria assert themselves
more strongly in these families' choice of housing when the possibility of entering middle-class housing is virtually non-existent.
The "desegregation" in middle-class housing estates is
likely to continue, perhaps at a faster pace, in part due to recent
governmental stipulations that private developers "regulate" the
ethnic composition of the housing estates through "racial quotas"
in the allocation of housing sales to different ethnic groups.21
But inasmuch as the expansion of the modern submarket means in fact
the continued segregation by class, possibly a greater degree of
-123-
residential segregation will result elsewhere in the urban housing
system. This will all the more be the case if the continued growth
of the modern submarket occurs at the expense of other urban housing.
Under such circumstances it would not be fortuitous to suggest that
residential segregation by race will persist as part of the housing
crisis.
-124-
CHAPTER 4: FOOTNOTES
1. See Table 2.5 in Section 2.2, above.
2. See, for example, Goh (1977:18-19), and Kamal Salih (1976:25)
3. Goh (1977:19). But $70-80 per room per month may itself be overestimated.
4. Arudsothy (1977:93). The breakdown of the "minimum wage rate" is
as follows:
Food
$94.11
Rent (utilities included)
86.13
Education
25.20
Other
24.13
TOTAL
229.57
5. cited in Rabieyah (1978:228)
6. Third Malaysia Plan (1976:160)
7. The estimate is made in Wegelin (1978:103), based on an estimate
of 16% increase in consumer prices between 1971-73. The povertyline income was estimated at $33 per capita per month in urban
areas.
8. Ishak Shari (1976:11-12)
9. Mid-term Review of the Third Malaysia Plan (1979:215)
10. Refer to Abraham (n.d.:19-20)
11. Reported in
National Star (Feb.
1977)
12. New Straits Times (Jan. 18, 1979). The newsreport mentioned that
"2.6 million - half the total working population - do not have
any contribution to fall back on."
13. Refer to costs of rentals shown in Table 3.10 in Section 3.3.
14. Wegelin (1978:67)
15. Sidhu (1978:19). Alsor-see Abdul Samad Hadi (1975:31-41) for a
study of elite residential location in Kuala Lumpur.
-125-
16.
McGee (1967:141)
17. Malaysian Business (Mar. 1978:33)
18. Dwyer (1975:100)
19. For a "spatial analysis of Penang State", see Georgulas (1972)
20. Vance
1971:118)
21. Cf. fn. 11, in Chapter 3.
-126-
CHAPTER 5
CONCLUSION - SOME IMPLICATIONS
OF THIS STUDY
In this last part of the thesis, the issues that we begin
with can now be restated, and the major findings from our analysis in
the previous chapters summarised. Our aim has been to explain how the
housing crisis in urban Peninsular Malaysia has developed over the
post-colonial period, and what role the modern submarket had played
in that development. In this respect, two central issues needed exlanation. The first was the coincidence of a "boom" and a deterioration in the urban housing situation. Second, there was also the intensification or rigidification in the pattern of residential segregation by ethnicity.
To deal adequately with these issues, we first proposed a
conceptual framework based upon the concept of labor reproduction.
This enabled us to focus upon the link - rather, the conflict - between
the requirements of the labor and housing markets as the underlying
cause of the housing problems. But in order to analyse the specific
and concrete urban housing situation in Peninsular Malaysia we provided a method of analysis that had two parts to it: the first concentrated on the process of labor absorption in the urban economy, and
the second was based on a typology of housing markets. The former
allowed us to examine the growth of urban population in
nial period,
the post-colo-
the convergence of labor of all ethnic backgrounds in
sphere of labor utilisation, and the urban income distribution. By
constructing our typology of submarkets, we could then analyse the
dynamics of change in housing stock for the various submarkets, the
the
-127-
residential circuits of different income and ethnic groups, and, most
important of all, the position of the modern submarket vis-a-vis the
others.
With the above in mind, we can summarise the major findings
below, and then utilise them to give an explanation of the housing
crisis, and the role of the modern submarket in its development. The
findings were:
i. the post-colonial sectoral shifts in the urban economy resulted
in the growth of urban population in the major towns, a substantial portion of which was due to in-migration from rural and
small urban centers;
ii. this urban population growth comprised the growth in both whitecollar and professional groups as well as blue-collar occupational groups, of which the latter was predominant;
iii. the ensuing income distribution was such that while there was an
increase in the middle- and upper-income groups, there was a
greater incidence of poor, low income groups; the urban income
distribution thus indicated a majority of the urban population
(by households) living at or marginally above the "subsistence
level";
iv. at the same time, and via the labor absorption process, there
occurred an increasing convergence of labor of all ethnic backgrounds in the urban economy to a large degree due to the government's efforts to speed up the absorption of Malay labor into all
levels of the occupational and income structure;
-128-
v. in urban housing provision, the proportion of housing provided
by the modern submarket grew rapidly and tremendously in contrast
to the overall decline of housing provided by other submarkets,
thus making the modern submarket the most important and dominant
submarket;
vi. the growth of the modern submarket, too, signified the expansion
of housing estates that for the most part provided more expensive
housing to middle- and upper-income households based solely on
their ability to pay for the housing;
vii. the expansion of this form of housing was greatly aided by the
expansion of the mortgage and housing loan system which worked
mainly to the benefit of middle- and upper-incpme families;
viii. the absence of adequate subsidies, and the failure of the mortgage
and housing loan mechanism to bridge the difference between subsistence or near-subsistence incomes of poor families and the
high costs of housing brought about an almost total "pricing out"
of poor families from modern submarket housing;
ix. being therefore "priced out" the poorer urban households could only
fall
back on the older submarkets which had themselves experienced
either net reductions in housing stock or only marginal increases
which in any case were insufficient to accomodate the increased
low income housing needs;
x.
the growth of the modern submarket enabled an increasing number of
middleestates,
and upper-income households to purchase homes in
the housing
leading to an increased ethnic convergence or interracial
-129-
mix in these housing estates;
xi. the residential circuits of different income and ethnic groups
fragmented prominently first along class lines, and next along
racial lines; the class fragmentation was pronounced between the
middle- and upper-class housing, and low-income housing, whereas
the ethnic fragmentation was most rigid for low-income housing.
The above findings can now be synthesized to formulate an
overall argument and explanation of the issues mentioned at the
beginning. The observed "boom" in urban housing has essentaially been
the expansion of middle- and upper-income housing as the modern submarket rose rapidly to meet the increased housing needs of these groups.
The "boom",
however,
has been accompanied by a deterioration as in-
creased numbers of poor families, "priced out" of the modern.submarket
housing, were forced to increase their demand on older submarkets that
had seen little growth in their housing stock. Thus the occurrence of
even worse overcrowding is explained by the growth of poor households
seeking shelter in already crowded housing such as the shophouses. On
the other hand, where the public housing has been insufficient to meet
the low income needs, the housing shortage can also be seen. And,
further, in the face of such developments the squatter settlements have
proliferated due to the difficulty or inabitlity of poor (especially
in-migrant) families in obtaining housing through even the older submarkets.
The role of the modern submarket in all this can thus be
accounted for by its character of being a submarket that provides housing as a commodity to be sold or rented exclusively for profits, and
-130-
maximum profits at that. As such its tendency has been to build more
expensive housing for those who can afford it; its "achievement", on
the other hand, has also been to deny almost all its housing to poorer
families. This effective "pricing out" has led to the deterioration in
the pattern of residential segregation by race as well. The residential by class which the modern submarket has accentuated has subsequently resulted in more rigid residential segregation by race within
the more established submarkets. Here again, the immediate factor is
traceable to the "pricing out" - itself
gut
nothing more than the working
in practice of the basic conflict between the requirements of the
labor and housing markets.
It might be worthwhile to pursue this argument further. Superficially, it is possible to contend that the rise of the modern submarket should properly be regarded as a service to the urban housing sector just in terms of the numbers of houses it has managed to build.
One would not, in reply, deny the expanded provision of housing by this
submarket. But precisely because there is nothing inevitable about
housing provision having to expand via the modern submarket's route,
the impact of the modern submarket has to be assessed more seriously.
What is after all the coincidence of "boom" and deterioration if not the
manifestation of urban inequality which, in the final analysis, provided
the basis for the modern submarket's expansion? Or again, as we saw,
the modern submarket's rise can be seen as growth at the expense of
other submarkets. Here it is surely not a question of "housing performance" by each submarket whereby the modern submarket has simply proven
-131-
itself more dynamic and more efficient. If it has been both dynamic
and efficient in this narrow sense, ultimately it is again because it
caters to a "clientele" that enjoys a comparatively privileged socioeconomic position. Perhaps at this point it makes ample sense to mention that the poor, in Wegelin's phrase, have not been able to "convert
their needs into effective demand".-
As Cornelius has shown for the
case of Mexico City, "a private real estate and housing construction
industry geared primarily to the creation of housing opportunities
for upper-income families in 'luxury' subdivisions, rampant land speculation, and the very limited amount of credit made available to wouldbe low income land purchasers or home builders have also contributed
powerfully to the acute shortage of conventional low-cost housing
opportunities."-
Not incidentally then do we speak of the modern sub-
market's rise at the expense of other submarkets. In the narrow and
specific context of a "competition for resources", therefore, it is
reasonable to say that the modern submarket has largely "outbidden"
all other submarkets: its control over the urban land market, credit
facilities, and housing development has ensured that it would effectively have a dominant position in urban housing provision.
But, as we have emphasized, the rise of the modern submarket
- seen as the growth of housing as a generalised commodity - has
brought to the fore the fundamental conflict between the requirements
of the labor and housing markets;
that is,
between low wages and high
housing costs. It is entirely possible that with the continued rise of
modern submarket, it may "meet" the needs of low income families either
by building more "low cost" housing (perhaps for rent first
as in
the
-132-
western countries) or even by supplanting the other submarkets - as
has happened to some extent in certain Latin American countries. The
latter course might take the form of a brisk business in
"illegal"
land subdivision and housing construction undertaken by agents quite
similar to real estate agencies, housing developers, and even financial isntitutions. At the point of its inception in Peninsualr Malaysia
the modern submarket "resolves" the conflict between low wages and
high costs of housing by simply not building houses for those who
cannot afford them.
If the general line of conceptualisation and analysis that
we have pursued is basically valid, some practical implications might
usefully be drawn that are relevant to housing problems and certain
attempts to solve them.
To begin with, from our standpoint, there is hardly any
"housing problem" to speak of independent of the responses of various
groups to the housing situation. Two such responses have been stressed
in this thesis - the modern submarket's "pricing out" the poor families
and the latter's response to it. To be exact, all the problems of shortage,
overcrowding,
slums and squatting can be seen as the result of
these responses.
This is
emphatically no trivial semantic quibble for its own
implication is that any attempt to solve the problems of housing must
be informed by such a perspective. For example, if the proliferation of
squatter settlements constitutes a form of response by certain low income groups to the poor housing conditions and opportunities, then
insofar as the housing situation remains substantially unremedied, so
-133-
can squatting be expected to persist. In this light it would make little sense to advocate or implement "squatter clearances" in the hope
that that will "deter" other families from setting up new settlements.
Unless viable housing alternatives are first.made available to present
and potential squatters,
any such advocay or policy is
unlikely to
succeed merely by depending on viewing squatting as a problem closely
bound up with the "legal ownership of land". Ample evidence from
3/
other countries - Kenya, for instance - support our contention. So
long as poor families are forced by circumstances to look to squatting as an importanct route to shelter not obtainable elsewhere, they
will continue to try to build their settlements. Demolition of this
type of housing will only lead to its re-emergence - and the two will
become interlocked in what conventional wisdom terms a "vicious
circle".
In much the same way, so should one see the problem of overcrowding and slum housing. One would not encourage the maintenance of
poor and insanitary housing at all
costs, but closing it
down or
demolishing it "to make way for urban re-development" or even because
of its violation of "building standards" would only exacerbate the
problem. It may be removed from'immediate view within the central
urban areas, but it would likewise re-emerge in some other place. The
point is that one must either improve the housing conditions (if the
concern with living conditions is genuinely felt) or provide sbetter
alternatives (in the case of demolition for urban re-development); otherwise, in all probability, the incidence of overcrowding and congestion
will become more acute.
-134-
Finally, in this regard, we see the same issue in residential segregation by ethnicity. One might need to emphasize that there
is also nothing inevitable about its existence or intensification.
But the response of low income groups to residential by class leads
them to a more rigid pattern of segregation that was historically
established. Short of actually providing adequate incentives for low
income families to reside in mixed neighborhoods - in general, much
better and cheaper housing than currently available - no amount of
rhetoric or exhortation on the merits of interracial residence can
prevail. These would simply run counter to the actual responses in
large part forced upon low income groups by their extremely limited
options.
But in a sense, all that has been described above can
actually be characterised as the "immediate" responses of the low income groups to the phenomenon of "pricing out" that they face. What
lies at the crux of the matter - and should not be obscured - is that
fundamentally the response is to the low incomes or wages that they
obtain which force them to reproduce themselves and their capacity to
labor only at levels affordable by the wages. In this case, their
levle of labor reproduction is low indeed, close to subsistence level,
as we have seen. Consequently, to the extent that housing as shelter
constitutes a major portion of the requirements for labor reproduction
(and hence its costs) low income families must resort to only perhaps
the cheapest housing that they can obtain. This, of course, leads them
into the older submarkets where the cheapest housing and the poorest
conditions are to be found.
-135-
And, now, conversely, we perceive properly the important
role of the older submarkets. Although we have chosen to focus on the
modern submarket, its rapid rise should not imply that the other submarkets play only a "marginal" role in urban housing. Their accomodation of poorer households which constitute a majority of the urban
population certainly makes it impossible to overlook or underestimate
their importance. A remark from Abraham would help to place the role
of the older submarkets in clearer light:
It is of course interesting to read that the Chief
Minister thinks that the electronic industries
being established in Penang is the most "glamorous"
result of the industrialisation policy of the
Government, but it would be more interesting if he
would be able to spell out how housing can be provided to workers who start off with $2.60 per day
and who may earn up to a maximum of $4.50 per day.
Is there any form of minimum standard housing commensurate with this wage structure?
4/ (emphasis added)
Surely there is none. That is why the older submarkets must be conceived of as having an important role in urban housing and in the
economy as a whole. The older submarkets together form a vast network
of sub-standard housing provided at costs precisely "commensurate" with
the wages of the low income groups. In particular, from the standpoint
of the labor market, the older submarkets perform the indispensable
function of keeping wages down by holding down the costs of labor
reproduction.
Such being the case, it would appear logical that so long as
the operations of the labor market continue to depress wages, or so
long as wage levels are incommensurate with the costs of decent housing,
the problems of housing are likely to worsen, not diminish. Any serious
-136-
attempt to resolve these problems in the long run must therefore try
to provide for substantial wage increases to levels where they can
cover the high costs of housing. How that is to be done lies more in
the realm of the labor market, and an analysis of it would take us
far beyond the confines of this thesis. What appears certain, though,
is that the current policies of the government with regard to the
labor market do not seem likely at all to ease the situation. As
Abraham has remarked,
The industrialisation policy of Government is
geared towards attracting foreign investment
(by setting up as) one of the main incentives
offered for foreign investment not only
cheap labor but also a disciplined labor
force that cannot seek higher wages through
industrial action.....as reflected in the
Labor Legislation of the country whereby
trade unions generally must function within
the avowed industrialisation policies of
5/
Government.
While this may satisfy the requirement of the labor market, in the
long run it will only maintain its conflict with the requirement of
the housing market with consequences that are already familiar.
In the midst of such a socioeconomic situation, most of the
attempts to solve the housing problems can only really be regarded as
trying to prevent them from getting even worse, not getting rid of
them altogether. But the severity of the housing crisis in Peninsular
Malaysia makes it imperative that such attempts be sustained in the
short run.
In particular,
until the urban housing submarkets - exclu-
ding squatter settlements - expand their housing stock substantially
and offer it at rates affordable by low income families, any attempt
to reduce the existing housing stock - now including squatter housing
-
-137-
by physical demolition is essentially indefensible. As the record of
past years indicates, each period has tended to accumulate an even
greated "backlog" in housing than the preceding one. Given such circumstances existing housing stock should definitely be preserved, and
improved.
Besides, short-term "solutions" to the housing crisis must
also be considered. These would include "self-help", "sites-and-services", "upgrading"
and rehabilitation programs. However, it must
still be recognized that these programs may contain their own problems.
Consider "squatter upgrading" for instance. While in
the short run,
projects of this nature may help to install much needed facilities,
in the long run it may further consolidate and freeze the existing
settlements into an even more rigid pattern of residential segregation by ethnicity. Let it not be mistaken that we propose that upgrading whould not take place, or, worse, that squatter settlements
should be "cleared". Nothing of that sort, but what is certainly called
for is a serious consideration of the development of the incentives we
spoke of earlier as an effort to tackle the issue of residential segregation. These incentives, provided they take into account the
"responses" of the families involved might go some way in motivating
breakdown of ethnic segregation by the low income groups themselves.
To this end, centrality must be accorded to local and particular needs
and problems; large-scale "social engineering" or "legislative/bureaucratic procedures" would have to be avoided.
If we are right, moreover, that wages have been kept low
-138-
while housing costs are high, then "self-help" programs can indeed
be regarded as trying to have low income groups subsidise their own
costs of labor reproduction partially through their labor - and thus
the maintenance of low wages.
enable still
To what extent then these
projects can be made to work in the long run for the benefit of low
income families without substantial increase in wages or reductions
in housing costs is by no means a settled question.
That perhaps brings us back to our theme: "the housing
market and the housing crisis". It
is
often pointed out that because
of high costs of labor, materials, etc., housing costs within the
modern submarket have to be high for any profits to be made at all. In
all probability, given the housing situation as it is, this is true
to some extent. But, then, from a social point of view, and particularly if one adheres to any "scarcity of resources" argument at all
(we do not),
the continued growth of expensive housing cannot but be
considered as a waste of badly neede resources. And with the massive
low income housing needs being what they are, this continued expansion
of the modern submarket's high-priced housing can hardly be justified
on virtually any ground - except if one accepts the existing state of
very obvious housing inequality. Housing as shelter, as a necessity,
and as part of labor reproduction - if all this is to be made available
to those most in need of it, then it seems logical to question the unchecked growth of the modern submarket's provision of what has been
euphemistically called "better quality housing".
A "better housing
situation" would necessitate the channeling of housing resources in a
much more equitable manner.
-139-
By way of concluding this thesis, it is instructive to observe that the literature on urban problems and planning in especially
the Third World (but not exclusively) has been increasingly pervaded
by a tone of alarm. Just about any problem of any significance tends
nowadays to be described as something of a "crisis" the proportions of
which are thought to have "exploded" beyond controllable bounds. In
the wake of such a development, it would be prudent to make no easy
assumptions about the "housing crisis" in any country - certainly not
in Peninsular Malaysia. Whatever the extent of the housing crisis may
be in reality, the alarm reveals at least a confusion, and possibly a
"crisis" within conventional understanding of housing issues. After
all most of the solutions to this crisis have hitherto been derived
from that understanding. And most have failed. It is with the recognition that conventional approaches to the housing problems of the
Third World can be uncritically accepted only at considerable risk
that this thesis has been undertaken.
We think that its
main aim is
still valid: to show that if housing problems have reached a critical
stage, then the roots of those problems must be sought deep in the
fundamental structure of inequality in the economy and society. As
someone once pointed out succinctly,
"whether there is
meat in
the
kitchen is never decided in the kitchen." With equal validity, one
might conclude that the issue of housing is not decided in the home.
-140-
CHAPTER 5: FOOTNOTES
1.
Wegelin (1978:96)
2. Cornelius (1976:260-61).
3. Kobiah (1978). See the chapter, "Origins of squatting in Kenya"
especially.
4. Abraham (n.d. :16)
5. ibid., p. 81
-141-
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